Bombardier top executives meet investors as stock dives 20 per cent

MONTREAL: Bombardier Inc’s top executives met with investors in Montreal after a disappointing free cash flow forecast and regulatory action, which sent the plane and train maker’s shares down 20 per cent, sources familiar with the matter said.
The Montreal meeting with Bombardier Chief Executive Alain Bellemare and Chief Financial Officer John Di Bert was previously scheduled but “the (high) participation and level of interest was driven by recent events,” said one of the two sources.
Bellemare had already met with investors following the free cash flow forecast on November 8, which sent its shares down more than 23 per cent on that day.
The Canadian company said it would only be able to meet its 2018 free cash flow estimate by using $635 million in proceeds from the sale of a Toronto plant earlier this year. Analysts had expected Montreal-based Bombardier to achieve its target of roughly breaking even on cash without relying on those proceeds.
Bellemare, credited with improving Bombardier’s finances after a crippling 2015 cash crunch, sought to reassure investors that the company would still achieve the company’s five-year turnaround plan designed to boost revenues and margins by 2020, said the source who could not provide further details on the meeting.
On Thursday, the province of Quebec’s securities watchdog asked Bombardier to halt stock trades under a plan set up to facilitate share sales by certain senior company executives.
The Autorité des marchés financiers (AMF) said it was “reviewing” transactions and “various announcements” related to Bombardier’s creation of an Automatic Securities Disposition Plan on August 15.
Bombardier stock closed down 20 per cent at C$ 1.67, adding to last week’s 31 per cent slide.
The sell-off in the stock also spread to bonds. Bombardier has about C$12.3 billion of bonds outstanding, much of which has been issued in US dollars, according to Refinitiv Eikon data. — Reuters