Topic: How To Invest

The Successful Investor Hotline – Friday, March 9, 2018

Article Excerpt

BOMBARDIER INC., Toronto symbols BBD.A $3.76 and BBD.B $3.75, is the world’s third-largest maker of commercial aircraft, after Boeing (No.1) and Airbus (No. 2). It’s also a leading maker of commuter trains. The stock fell 5% this week after the company agreed to sell 168.0 million class B subordinate voting shares to a group of underwriters at $3.80 a share, for a total of $638.4 million. If those underwriters choose to exercise their option to buy an additional 25.2 million shares, Bombardier would receive a total of $734.1 million. Selling that maximum number of class B shares (193.2 million) would increase the number outstanding by roughly 10%. The cash will help the company cover the costs of its five-year turnaround plan, which began in 2016. The strategy mainly involves cutting 10% of its workforce , which will generate significant severance costs. As well, Bombardier will probably use some of the cash to pay down its long-term debt of $9.2 billion U.S. (as of December…

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