Shares of Bombardier (T.BBD.B) surged on Wednesday morning, while the government is likely Couillard about to come to the rescue of Quebec multinational.
At the Toronto Stock Exchange, the company’s title won more than 8% in the morning to rate $ 1.57.
According to La Presse, government intervention Couillard would be announced Thursday after the release of third quarter results of the manufacturer of aircraft and rolling stock.
It is still unclear the details surrounding this financial boost and he will be by the provincial government or its financial arm, Investissement Québec. It is not clear either whether the Caisse de dépôt et placement du Québec – an institutional investor shareholder of Bombardier – could play a role.
When asked about it in the morning on his arrival at the Liberal caucus meeting, the Minister of Economy, Jacques Daoust, declined to comment.
According to Benoit Poirier of Desjardins Capital Markets, Quebec could take a direct participation oscillating between $ 1 billion and $ 2 billion in Bombardier Transportation or provide favorable financing terms to customers of the CSeries.
The analyst, however, doubt equity financing since the title of the company lost 62 percent of its value since the beginning of the year.
An investment in the rail industry Bombardier would generate cash and allow the company to stop selling a minority stake of this division, Mr. Poirier wrote in a note.
“Assistance to potential clients would ensure the long term viability of the CSeries program in addition to potentially stimulate new orders,” he adds.
The governments of Quebec, Canada and Columbia have made significant financial contributions in the past to support the development and sale of the CSeries.
The program of this commercial aircraft can carry 110-160 passengers has so far cost more than 5.4 billion US. After two years of delays, the first deliveries of the aircraft are scheduled for next year.
Meanwhile, the Minister of Northern Ireland’s economy, Johathan Bell, met with senior executives of Bombardier this week as part of his five-day mission to Montreal and Toronto.