(Reuters) - Bombardier Inc (BBDb.TO) said on Thursday it will stick by its remaining commercial aerospace program after agreeing to sell its biggest land asset, as the Canadian plane and train maker strives to raise cash to pay down its debt.
Investors reacted positively to the news, pushing up the stock as much as 3 percent to C$4.05 in early trade.
The company, which has a long-term debt of $9.1 billion and considered bankruptcy in 2015, sold its Downsview site in northern Toronto to the Public Sector Pension Investment Board for $635 million. That facility is an assembly site for its Q400 turboprop passenger planes and is one of four final assembly sites it uses.
Thursday’s sale, combined with an equity raise of C$638.4 million ($496.73 million) in March gives the company $1 billion in cash.
“This (the Q400) is a product line we’ll keep pushing,” Chief Executive Alain Bellemare told analysts on a call, allaying concerns about the plane line’s future. The company has up to five years to find a new assembly site for the plane.
He said the deal would allow the company to “monetize an underutilized asset and optimize our business aircraft operations.”
The Q400, with a backlog of 50 planes, has about 25 percent of the global market in small commercial planes, second to European rival ATR, the world’s largest maker of turboprops.
Bombardier also agreed to sell a controlling stake in its flagship CSeries jet to Airbus (AIR.PA) last year for a token C$1 after struggling