Bombardier Inc., the world’s third-largest commercial-plane maker, agreed to sell its financing business for equipment such as boats and snowmobiles to General Electric Co. for $1.4 billion to pay down debt.
GE Commercial Finance said today (April 18) it also will assume $1 billion in debt. The Bombardier business has about $2.2 billion in assets and provides financing for all-terrain and recreational vehicles, as well as manufactured-housing dealers.
Bloomberg.com reported that selling the business will allow Montreal-based Bombardier to cut debt by $1.6 billion. The company suspended its annual dividend last month for the first time in 32 years to conserve cash after demand from airlines slumped, and its debt rating fell to below investment grade in November.
Bombardier, which is seeking funds to build its biggest plane ever, had long-term debt of $6.9 billion as of Jan. 31.
The finance business will be folded into Stamford, Conn.-based GE Commercial Finance’s Vendor Finance unit, which will take on 280 Bombardier employees in Colchester, Vt., and Brossard, Quebec, the companies said.
Bombardier last month reported a net loss of $85 million for fiscal 2005, unchanged from a year earlier and its third straight annual loss. Revenue rose 2.2% to $15.8 billion.