- Transport giant Bombardier (BBD.B) has cut approximately half a billion dollars from its second quarter cash usage
- Alongside these cash savings, the company has secured a three-year term loan from HPS Investment Partners for up to C$1 billion
- Bombardier will use the funds to strengthen its cash reserves and undertake a capital restructuring initiative in the wake of the COVID-19 pandemic
- To help weather the airline industry’s recent downturn, the company currently has $1.7 billion in cash and $2.4 billion in liquidity
- Bombardier (BBD.B) is up 9.89 per cent and is trading at 50 cents per share
Transport giant Bombardier (BBD.B) has cut approximately C$500 million from its second quarter cash usage to conserve liquidity during the pandemic.
Alongside these cash savings, the company has secured a three-year term loan from HPS Investment Partners for up to $1 billion. The credit facility will come into effect during the third quarter to further bolster Bombardier’s cash float.
According to the terms of the facility, Bombadier must draw down atleast $750 million over three years. Further, if the company sells its Bombardier Transportation sector it must repay at least 50 per cent of the loan’s outstanding balance.
The company will use the funds to undertake a capital restructuring, which it previously announced following a steep plunge on the TSX, earlier this year.
Headquartered in Montreal, Bombardier has engineering and production operations in more than 25 countries, and it has been one of the companies most substantially hit by the onset of COVID-19.
Between the end of February and late March, the company’s share price fell more than 65 per cent, as pandemic-induced travel bans ravaged the airline industry around the globe.
Though Bombardier’s shares have somewhat recovered in the intervening months, it is still currently trading more than 30 per cent lower than before the onset of COVID-19.
To help weather the airline industry’s downturn, the company currently has around $1.7 billion in cash and $2.4 billion in liquidity.
With prolonged damage to the airline industry expected to last over the next few years, numerous transport companies are scrambling to sure up cashflow for the foreseeable future.
Bombardier (BBD.B) is up 9.89 per cent and is trading at 50 cents per share at 2:25pm EDT.
