Wednesday 18 September 2019

Shares in Bombardier nosedive after executive share sale plan is probed

Shares in aircraft maker Bombardier have plunged to their lowest level in two years (Niall Carson/PA)
Shares in aircraft maker Bombardier have plunged to their lowest level in two years (Niall Carson/PA)

Frederic Tomesco

Shares in aircraft maker Bombardier, a major employer in Ireland, plunged to its lowest level in two years after Canadian regulators said they were reviewing the company's executive stock-sale programme in the wake of an earlier share rout.

Quebec's financial regulator, Autorite des Marches Financiers, ordered the suspension of all such transactions until further notice. Bombardier said it would fully cooperate with the probe of the stock-disposition plan, adopted in August.

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The regulatory scrutiny intensifies stress on Bombardier a week after a drastic cut to its cash-flow forecast undermined confidence in chief executive Alain Bellemare's turnaround plan. The disappointing outlook had already erased a third of Bombardier's market value even before the shares extended their decline on Friday.

"With the pressure on Bombardier's stock, preceding and following the release of our financial results on November 8, some had raised doubts about trading that may have occurred in the last months," said Olivier Marcil, a spokesman for the Montreal-based company. Bombardier declined to comment on whether any executives have sold shares since the sale plan was announced. The stock was on track for its worst week since 2008.

Bombardier's $1.5bn (€1.3bn) in bonds due in 2025 led declines among global high-yield notes denominated in US dollars on Friday, falling 2.3 cents to 90 cents on the dollar. The bonds are down 11pc since November 7.

Quebec is ready to work with Bombardier if the government's help is required, economy minister Pierre Fitzgibbon said. He met with Bellemare earlier in the day to discuss ways for Bombardier employees whose jobs will be cut to find work elsewhere. The manufacturer said last week it would cut 5,000 jobs, half of them in Quebec.

Bombardier said in August that transactions under the stock-sale plan would take place over two years. The shares closed at C$4.64 on the day the programme was announced. Bellemare and other top executives aimed to sell holdings valued at a combined C$164m (€109m), based on the share price at the time.

Bellemare wanted to sell as many as 7.04 million Class B shares, and chief financial officer John Di Bert planned to unload 4.36 million shares, according to the filing. Chairman Pierre Beaudoin, whose family controls Bombardier through multiple-voting shares, intended to sell as many as 3.1 million shares.



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