First $500M for CSeries

Photo: The Canadian Press

Bombardier Inc. and the Quebec government have reached a definitive agreement for the province to invest US$1 billion towards the CSeries passenger jet program.

The two sides have been working out details of the agreement since the plan was originally announced in October.

The Montreal-based company (TSX:BBD.B) says it expects to receive the money in two instalments of US$500 million each, with the first to be received by Bombardier on June 30 and the second on Sept. 1.

Bombardier says a final deal will be reached when certain customary conditions are met.

Once the Quebec government's investment is complete, it will own 49.5 per cent of a new limited partnership with all the assets, liabilities and obligations of the CSeries aircraft program.

The CSeries aircraft is two years behind schedule and has incurred about US$2 billion in cost overruns. The first planes are slated to enter into service with Swiss Airlines in July.

Premier Philippe Couillard has said Quebec's timely intervention in the CSeries commercial aircraft program was key for securing orders from Air Canada and Delta Air Lines.