RE:RE:RE:🚂🚂🚂Bombardier and Alstom Sign Definitive Agreement🚂🚂🚂Good news in that it removes some uncertainty, but really, this deal was never in question. BBD needs the money, and Alstom would never walk away from such a gift, especially considering they are able to structure the deal mainly as a stock transaction.
It is disappointing that they will only net about $4B. With probably about $1B cash going with BT that means BBD will only add about $3B in liquidity. This means that they should be able to pay out the $1.4B debt due Dec 2021, and the $0.5B due in Mar 2022, but unfortunately puts into question their ability to pay out the $1.2B debt due in Oct 2022. Hopefully, by then, BBD will be able to generate consistent profits, and they may be able to refinace whatever portion of that debt that they can't payout at a rate lower than the 6% it is costing them now.
Fortunately, they do benefit a little from the strength of the Euro relative to the USD.
Jim
pablo87 wrote: Great news! Even though I though they should have kept some share of BT, obvoiusly the situation is not as good as I had hoped, thanks to COVID mostly.
The press release didn't address certain issues (obviously) - what will the Bombardier balance sheet look like post BT obviously but also, how will BT be treated in Q3 - assets and liabilities held for sale? And how will the cash portion be accounted for? And what about the money that CDPQ and Bombardier injected in BT in Q1 and Q2 respectively?
Say for example some customers fail to pay BT near the close and BT ends up with $500M more Receivables than they were supposed to and a $500M cash shortfall, do they inject $500M to reach the $1B threshold and keep the Receivables until collected?