BOMBARDIER PRESENTS RECAPITALIZATION PROGRAM FEATURING EQUITY OFFERING AND ASSET DIVESTITURES
Thursday April 3, 6:00 am ET
TORONTO, ONTARIO–
TELLIER SAYS EMPHASIS ON TRANSPARENCY AND ACCOUNTABILITY WILL DRIVE
CHANGE IN CORPORATE CULTURE
FINANCIAL RESULTS FOR FISCAL 2003 ARE ANNOUNCED
– Equity offering of at least $800 million
– Planned divestitures including Bombardier Recreational Products
expected to raise in excess of $1.5 billion
– Reduction of dividend
– Change in governance structure
– Bank covenant amended
– Bombardier Capital to focus on only two portfolio categories
– New accounting policies adopted to enhance investor understanding of
the Corporation’s performance
– Consolidated revenues for fiscal 2003 of $23.7 billion and net loss
of $615.2 million after non-cash special items of $1.3 billion
($959.7 million after tax)
– Free cash flow of $801.4 million
– Order backlog of $44.4 billion
Bombardier President and Chief Executive Officer Paul M. Tellier announced a major recapitalization program which includes the filing later today, with the securities regulatory authorities in Canada, of a preliminary short-form prospectus providing for the issue of Class B shares. The equity infusion will strengthen the Corporation’s balance sheet and bolster working capital.
Gross proceeds from this equity offering are expected to be at least $800 million and will supplement the Corporation’s working capital and be used for general corporate purposes. The securities to be offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, absent registration or an applicable exemption from registration requirements.
A NEW BOMBARDIER
The equity offering leads a list of initiatives designed to strengthen the company’s balance sheet and refocus the Corporation on the aerospace and transportation businesses. To that end, Tellier announced Bombardier’s intention to divest Bombardier Recreational Products, as well as other non-core assets.
“We will rebuild our credibility with investors with the action plan we are announcing today,” said Tellier. “The sale of our recreational products business provides a good balance between our asset divestitures and the equity offering. Combined with our cost reduction programs, it gives us the financial flexibility we need going forward.
“Our story is a story of recovery. We are acting rapidly and strategically to re-energize the Corporation by strengthening our balance sheet and putting the liquidity concern and the bank covenant issue behind us.
“Rigour and consolidation are the order of the day. Tighter accountability and financial discipline are being applied across the Corporation. Bombardier today is focused on value creation,” he said.
ASSET DIVESTITURES
The Corporation has decided to divest its recreational products business as it is the most liquid asset in Bombardier’s portfolio. The Corporation has retained UBS Warburg as financial advisors and Ogilvy Renault as its legal advisors for this transaction.
The controlling shareholder supports the Corporation’s plan to unlock the value of the recreational products group at this time.
