Connect with us

Business

Bombardier suffers biggest tumble on record after sales warning – BNNBloomberg.ca

Published

on


Bombardier Inc. fell the most on record after warning of disappointing fourth-quarter sales and revealing that it may exit a joint venture with Airbus SE that makes the A220 jetliner, potentially triggering a major writedown.

A ramp-up in A220 production will require additional cash investment, pushing back the break-even point and generating lower returns across the lifetime of the project, Bombardier said in a statement Thursday. The value of the A220 joint venture is likely to be diminished and the amount of any accounting charge will be disclosed with full 2019 results next month, the company said.

The potential end of Bombardier’s involvement in the A220 program is combining with new stumbles in the company’s rail business to undermine a once-great name in manufacturing — just when investors thought they were poised to reap the rewards of a difficult turnaround effort. Walking away from the A220 would close the book on Bombardier’s involvement in an aircraft program in which the company invested more than US$6 billion.

“The joke continues. Anyone involved with the story has a gun to their head,” said John O’Connell, chief executive officer of Davis Rea Ltd., who doesn’t hold Bombardier shares or bonds. “This company has been a disaster my whole career and I’m almost ready to retire.”

Bombardier plunged 30 per cent to US$1.25 at 12:56 p.m. in Toronto after sliding as much as 39 per cent for the biggest intraday tumble on record. That dragged shares to the lowest level in almost four years.

The company’s 7.85 per cent bonds due 2027 fell 6.2 cents, the most on record, to 96 cents on the dollar, yielding 8.6 per cent, according to Trace data. The US$1.5 billion in notes due 2025 dropped 3.9 cents to 98.1 cents on the dollar to yield 8 per cent, the highest since Oct. 31.

Bombardier needs to ‘just deliver’ what they promise: McGill’s Karl Moore

Karl Moore, professor of business strategy at McGill University, joins BNN Bloomberg to react to Bombardier slashing its outlook, warning on cash burn and considering pulling out of the A220 partnership with Airbus. He says that CEO Alain Bellemare has done an excellent job in a tough turnaround for the business.

Disappointing Sales

Bombardier, which is refocusing its operations on rail equipment and business jets, said fourth-quarter sales would be US$4.2 billion, trailing the lowest analyst estimate in a survey by Bloomberg

The results were dragged down in part by new challenges in the company’s faltering rail division, which generates about half of sales. The business got a black eye this month when New York removed 300 Bombardier-made subway cars from service because of door glitches. For the fourth quarter, the manufacturer said it would take a US$350 million accounting charge because of problems in London, Switzerland and Germany.

The timing of milestone payments also clipped results late last year, Montreal-based Bombardier said. So did the delay of some deliveries of the Global 7500 business jet into the first quarter of 2020.

Liquidity remains strong, with year-end cash on hand of roughly US$2.6 billion, Bombardier said. But the company is considering alternatives to accelerate debt reduction and strengthen its balance sheet. Full results are scheduled for Feb. 13.

“The final step in our turnaround is to de-lever and solve our capital structure,” Chief Executive Officer Alain Bellemare said in the statement. “We are actively pursuing alternatives that would allow us to accelerate our debt paydown.”

Trouble is, Bombardier may be running out of sizable assets to sell to meet its cash needs, said Bloomberg Intelligence analyst George Ferguson.

“Bombardier needs to get its rail business — the earnings and cash-flow driver — on track, while restructuring its aviation division in a soft business-jet market,” he said in a report.

Commercial-Jet Retreat

The potential end of Bombardier’s involvement in the A220 program would cap the company’s broader retreat from commercial-plane manufacturing.

Bombardier ceded control of the A220 last year to Airbus for no upfront cash. The plane — originally known as the C Series — won praise for its fuel-efficient engines, composite wings and large windows. But the program ran more than two years late and about US$2 billion over budget, and Bombardier had trouble finding buyers in an industry dominated by Airbus and Boeing Co.

Airbus said it would continue funding the A220 program “on its way to break-even.” The European aerospace giant owns a 50.01 per cent stake in the regional jet, with Bombardier retaining 31 per cent and state-backed Investissement Quebec holding some 19 per cent.

The jet added 63 orders in 2019, with 105 currently in service and a backlog of close to 500 planes. Airbus will begin producing the A220 on a second assembly line this year at its factory in Mobile, Alabama.

Bombardier agreed last year to sell a plant in Belfast, Northern Ireland, that makes wings for the A220. The buyer, Spirit AeroSystems Holdings Inc., is seeking to boost its exposure to Airbus programs after suffering as a supplier to Boeing’s grounded 737 Max.

The Canadian company also agreed to sell its regional-jet program to Mitsubishi Heavy Industries Ltd. 

poll image

Which of these is the best option for Bombardier?



Total Results: 0

Let’s block ads! (Why?)



Source link

Business

'A heartbreak': Ranchman's searching for new owner amid COVID-19 pandemic – Calgary Herald

Published

on


Article content continued

“With everything happening and the Calgary downtown being almost completely empty, it’s created sort of the perfect storm for restaurant killing and hospitality killing.”

Ranchman’s has been synonymous with Calgary cowboy culture for nearly 50 years after it first opened its doors April 27, 1972.

The country nightclub was a popular spot during the Calgary Stampede and throughout the rest of the year, being named the “Country Club of the Year” by the Canadian Country Music Association 11 times.

The venue temporarily shut its doors due to the COVID-19 pandemic on March 17, and it has remained closed since. Nightclubs such as Ranchman’s are not permitted to reopen until Stage 3 of Alberta’s relaunch, and public-health officials have said there is currently no timeline for when that might happen.

The bar was founded by Harris Dvorkin and Kevin Baker but ownership traded hands in 2017, following Dvorkin’s death. Calgary bar scene mainstay Doug Rasberry purchased the property alongside a group of local business owners.

Members of the Ranchman’s ownership group did not respond to numerous requests for comment from Postmedia.

Campbell said owners were only talking to “a select few people” about the situation.

“This was a heartbreak for him. Doug (Rasberry) was the first guy, when I took Ranchman’s to the market three and a half years ago, Doug lit up like a kid at Christmas. He was so excited to have an opportunity to take this history on,” he said.

Let’s block ads! (Why?)



Source link

Continue Reading

Business

Calgary’s famous Ranchman’s country bar up for lease; iconic rafter saddles seized by bank – Global News

Published

on


Ranchman’s Cookhouse and Dancehall in Calgary, a country bar known for its rafter saddles and mechanical bull, is up for lease.

The building that hosts the bar, at 9615 Macleod Trail S.E, has been listed publicly for the first time in its history.

The real estate company running the lease told Global News that the building is available after the current owners terminated their lease due to COVID-19 economic struggles.

It had initially been taken over by new owners in 2017 — when the former owners sold the business, but kept ownership of the building itself.

Read more:
Ranchman’s new owners to preserve iconic Calgary restaurant, cowboy culture

Story continues below advertisement

One concern is the iconic saddles that hang in the rafters have been seized by the bank, said realtor Rob Campbell.

Even though they don’t belong to the business owner, they’re being considered assets and are in the process of being seized.

Campbell said he’s received many calls with concerns from local members of the rodeo community over the loss of the history.


Ranchman’s Cookhouse & Dancehall.


Global News

Ranchman’s opened in 1972, nearly 50 years ago.

It closed due to the COVID-19 pandemic on March 17 and has not reopened.

Read more:
Consumers left with worthless passes and gift cards following COVID-19 business closures

Nightclubs are part of Stage 3 of Alberta’s relaunch and are not permitted to be open in the province yet.

Story continues below advertisement

© 2020 Global News, a division of Corus Entertainment Inc.

Let’s block ads! (Why?)



Source link

Continue Reading

Business

20 new cases of COVID-19 recorded in Saskatchewan push provincial total past 1,800 – CBC.ca

Published

on



The number of COVID-19 cases recorded in Saskatchewan continues to climb.

On Sunday, the province recorded 20 new cases, bringing the provincial total to 1,807. 

Of the new cases, 10 are in Regina, seven are in Saskatoon and two are located in the South East zones. The location of one more case is pending. 

The province indicated the seven new cases in Saskatoon are linked to the outbreak at Brandt Industries, where a total of 14 cases have been linked to the workplace. The Government of Saskatchewan indicates investigation has shown this outbreak may be linked to out-of-province travel.

This is the third day in a row the province has recorded double-digit increases. On Friday, the province recorded 19 new cases and 11 new cases on Saturday. 

Of the province’s 1,807 total cases, 140 are considered active and 1,642 are considered recovered. Twenty-seven of the 140 active cases are in communal living settings. 

The number of people in hospital has remained static at 10.

Active cases in Saskatchewan can be seen detailed in this graphic published by the Government of Saskatchewan as part of it’s daily COVID-19 updates. On Sunday, the province had annouced it recorded 20 new cases, bringing the provincial total to 1,807. (Supplied/Government of Saskatchewan)

According to the province’s daily update, nine people are receiving inpatient care and one is in intensive care. Seven of those patients are in Saskatoon, one is in Regina and another is in the South Central zone. The intensive care patient is currently receiving treatment in Saskatoon. 

Drive-thru testing in Regina will also be expanded and will now be available on Wednesdays from 4 p.m. to 8 p.m. When the drive-thru testing launched, it was originally open on Tuesday, Thursdays and Saturdays. 

Hours at the drive-thru testing site in Saskatoon have gone unchanged. 

So far, the province has conducted a total of 171,945 COVID-19 tests, with 2,426 conducted on Saturday alone. The province also announced it reached an important milestone when it comes to testing over the weekend, as it set a testing record with 2,873 tests conducted Friday.

That’s compared to the province’s previous record of 2,129 tests performed Aug. 6, 2020.

Let’s block ads! (Why?)



Source link

Continue Reading

Trending