The company reported a quarterly loss of $4.6bn, largely due to writing down the value of its investments in CSeries and Learjet 85.
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The Quebec government is set to invest $1B in Bombardier’s (OTCQX:BDRAF, OTCQX:BDRBF) struggling CSeries.
The company confirmed a Reuters report from Wednesday that it plans to form a joint venture with the government of Quebec to complete work on the long-awaited new jet that is billions of dollars over budget.
The company said the impairment charge for the CSeries comes after an in-depth review of the program and talks with the Quebec government.
“It’s not every day I have to figure out if the government of Quebec and the government of Canada are going to essentially nationalize Bombardier”, he said in an interview.
“We are taking the right actions and we have solidified our liquidity position, giving us the confidence to execute our long-term strategic plan”, Chief Executive Alain Bellemare said in the company’s earnings statement.
It’s also continuing efforts to sell a minority stake in its rail equipment business, Bombardier Transportation, which sells subway cars and other mass transit systems.
In May, it said it would cut 1,750 jobs in its business jet unit, which followed a cut in January of 1,000 jobs after it halted Learjet 85 development. The CSeries, already running two years behind the schedule, has been an expensive and hard project for Bombardier.
Even without the massive writedowns, Bombardier’s results were weaker than expected.
Hopes for a government bailout prompted a surge in Bombardier shares on Wednesday ahead of what is expected to be gloomy third-quarter results.
On an adjusted basis, net income amounted to $2 million, or breakeven per share, compared to $222 million, or $0.12 per share, for the same period the previous year.
The widely traded Class B shares rose 11 percent to C$1.61 at 3:52 p.m.in Toronto.
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Revenues are forecast to approach US$4.6 billion, down from more than US$4.9 billion in the third quarter of 2014.
