Bombardier Going Private? Name of First Global 7500 Client and much more... My New Insider Update!
Ville St-Laurent property estate is the next to go for Bombardier - Global 7500 Sold Out Until Into 2022
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13:05 (18:05 UTC) - December 19, 2018 - Quebec, Canada - by Sylvain Faust for Fliegerfaust
First read my previous update here - this article is a follow up.
My findings confirm that Bombardier is currently engaged in divesting itself from its remaining assets at the Ville St-Laurent estate, land and installations.
Ville St-Laurent property estate is the next to go for Bombardier
A specialized firm is involved for this purpose and is already at work. The process should be brought to a conclusion at any moment during the first quarter of 2019. As it should be patently obvious by now, it would be pointless for Bombardier to maintain factories on land that has considerable market value, when the very same work could be accomplished on much less expensive property, involving lower production cost --and the ability to recover the "cash" value from those lands.
It's no big secret the company is currently increasing its cash on hand as much as feasible, putting it at work where a higher return is to be achieved. Investors, as they come, are certainly not looking for some real-estate bonanza when investing in Bombardier Inc.
At the end of the day, thus, the conclusion is inescapable: the historic Ville St-Laurent estate is next to go, as it represents the final chapter in the saga of what used to be Canadair installations and Cartierville Airport, in the west portion of Montreal Island.
- Delivery of the first aircraft to the first customer
- Over 100 aircraft sold
- Next Free Delivery Slots are in 2022
December 20 will be a celebration day at Bombardier Business Aircraft (BBA). Present for the event will be customer representatives (more on this below), Alain Bellemare, CEO of Bombardier, company board members and "the family" celebrating the delivery of the first Global 7500 aircraft.
As I wrote previously, the aircraft MSN (manufacturer serial number) is 70006. It has been flying around in the last few days with the specialized aviation consultant representing the client toward its official acceptance, which is now complete.
The slick new machine flew from Montreal to Burlington on December 13. Then, later on the same day, to Windsor Locks Bradley International Airport, in Connecticut, near Springfield, Massachusetts.It is currently back at Montreal Dorval airport Bombardier facilities.
I have to rectify what I wrote about the identity of the client to take delivery of the first Global 7500. And no, it is not Niki Lauda, since the aircraft is still pending its EASA (European Aviation Safety Agency) certification.
Its engine made by GE Aviation just received its EASA certification December 18, 2018, so we can now expect completion of the European certification protocole in a matter of weeks. Meaning? Delivery process could also start to European customers, including registration of the aircraft in Europe.
This said, the client for this aircraft is from the US. The first client to be taking delivery of the first Bombardier 7500 aircraft is a privately held commercial finance company established in 2015 and based in Plano, Texas.
This newcomer is not just your usual new kid on the block, mind you, as it is building a world class, multibillion-dollar platform of commercial loans and leases, offering financing solutions to a wide variety of industries throughout the entire credit spectrum, for businesses located in the United States, Canada, and select foreign jurisdictions, as it says on their website. But you know what? They are the lessor of the aircraft, not the final user. Stonebriar Commercial Finance is the first customer.
The first Bombardier Global 7500 aircraft will be travelling around the world for months demoing this new jewel. Upon completion of its showcase tour by Bombardier, the bird will be returned to the leasing company who, in turn, will promptly hand it over to whomever they are leasing it to.
As you will understand, the identity of the client is of minor importance, and even becomes a moot point, if you wish, when you get to grasp the basic issue at hand: Bombardier has now started the delivery of this new aircraft model and cashing the large final payment from their customers.
Management is working to ramp up the production to four (4) aircraft per month as quickly as possible with the order book full until into 2021. You can read more on this in my previous update.
Expect to see January 1, 2019 as the start of a new advertising campaign promoting the Global 7500.
You read correctly, over 100 aircraft have been sold. BBA is even trying to free (create) delivery slots for quick walk-in clients to whom the price is not an Issue. Next slots are in 2022.
At the ceremony you will not only see the first Global 7500 aircraft to be delivered, MSN 70006 but also the first Global 7500 made, MSN 70001 (aka FTV1).
LearJet / Challenger
In my previous update, I wrote that the Learjet 85 was to be making a comeback. Not "as-is", of course. A team is currently working on the successor of the Learjet 75, and no, "85" shall not be part of the monicker. It will not be a totally composite aircraft. But then, can we expect a plane in the vein the CSeries (A220), a small quick and fast business jet successor of the Learjet 75, with composite wings and other parts?
Do not expect any news from Bombardier on this for a couple of years or more, at least. Before hearing anything on that front, on the other hand, we should be learning a bit more about a new Challenger, for instance. But, for the time being, all these would-be flying marvels, remain at the conceptual level. They are at a very early stage, --on the drawing boards of tiny design groups, still miles away from material cost and other down to earth considerations--, but, rest assured, the future is being worked on. That is what to expect, taking care of the future products, always.
The Q400, again…
I know, I said I rest my case about the Q400 since for me this is old news having announced over a year ago that Bombardier was in the process of selling it and then identifying clearly the buyer as Viking Air and its financing arm company.
Now what? Expect communications from Bombardier telling the employees the Q400 manufacturing is to be remaining in Ontario, Canada still after the closing of the transaction. What are we to make from this, if you ask me? With the sale of the program the only thing it means is that the Q400 assembly work will remain in Ontario until the end of the contract with the union/workers and/or as long as the Downsview site is available, until the promoter (new site owner) takes over the land.
Remember, the new Q400 owner wants it closer to what he calls home, Alberta and British Columbia.
CRJ – Airbus A100
As I pointed out already (read this article) with Boeing to begin to offer widely acquired Embraer aircraft models with 70 seats and up, Airbus would want to have that tool in its toolbox, -a smaller successful, aircraft when dealing with clients often operating a mix of aircraft sizes dealing with different market requirements and law. Expect a partnership helping Bombardier to get rid of the CRJ program but not closing the Mirabel production.
Many components are up in the air on this one, with involvements of government on top. Provincial and federal you asked? More on this soon.
Bombardier Going Private?
Taking a company "Private" is the opposite of taking a company "Public", i.e. it means taking a company "off" any public stock exchange, back to its "private" state as prior of the company going public. This is one of the options the Bombardier and Beaudoin family are currently exploring, as I have heard by the vine.
Why so? The main reason in this case is the acknowledgement of the value of the company by the financial market or lack thereof. Going private has many advantages as not to have to report to financial analyst quarterly and instead focusing on the longer term goals and the execution of the business plan.
Being a public company is also expensive. Saving on all expenses related to the compliance to the stock exchanges the company stock is listed on, financial reports, audits, law compliance, news/public release, disclosures, etc.
It would make it also easy for management to changes things drastically without having to worry about how "the stock market" would appreciate/react.
What does it mean to the current "outsider" shareholders? Since a premium to the stock price has to be paid to buy out all shares from all shareholders a rise in the stock price is expected.
What this really means? It means the Bombardier/Beaudoin family and some deep pockets investment banks do think the current value of the company, as per the stock price currently traded on the public stock exchange, is way too low compared to what the company is really worth. But this also would allow the management to focus on the execution of their plan instead of having to spent their precious time explaining to analysts, journalists and the like, what they are doing and why.
If the stock price does not appreciate drastically from now until into 2020, know that they are planning on "taking care of business" one way or the other. Would you like to be short on this stock with this over your head?
Read this if you want to understand what going private means "Why Public Companies Go Private".
Is all this real you asked? We'll see...
Sylvain Faust, for Fliegerfaust
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