Bombardier to suspend work at Canadian plants amid virus fallout
MONTREAL - Bombardier Inc. is confronting sobering questions about its future following new share price lows and two credit downgrades.
The plane-and-train maker's stock sunk to its lowest level in more than 25 years on Thursday, closing at 42.5 cents before falling a further six per cent in midday trading Friday.
A week earlier, Fitch Ratings cut Bombardier's credit rating to CCC from CCC+ several days after the manufacturer suspended production in Canada, sending 12,400 workers on unpaid leave due to government requirements prompted by the COVID-19 pandemic.
Standard & Poor's also dimmed its view of Bombardier credit to CCC+ from B-.
S&P said Bombardier's "financial commitments appear unsustainable in the long term," with the possibility the company would pursue debt restructuring within 12 months.
The Montreal-based firm, which carries a $9-billion debt despite multiple asset sales over the past five years, will be reduced to a single revenue stream -- business jets -- after it announced the sale of its rail division to French train giant Alstom SA in February, just as demand for private planes falls away amid the broader economic slowdown triggered by the outbreak.