Bombardier Receives Notice of Claim from Certain Holders of 2034 Notes

Rhea-AI Summary

Bombardier announced it received a letter from holders of 7.450% Senior Notes due 2034, alleging breaches of covenants related to its divestiture of non-core assets including its transportation business. The company is also facing a legal complaint filed in New York. Bombardier asserts these claims are unfounded and plans to defend itself vigorously, believing its actions have complied with indenture terms and facilitated business repositioning and balance sheet strengthening.

Positive

• Bombardier believes the actions taken have strengthened its balance sheet.
• The corporation aims for long-term growth and value creation.

Negative

• Claims of covenant breaches related to divestitures could lead to potential legal and financial repercussions.
• Ongoing litigation may distract from operational focus and affect investor confidence.

MONTRÉAL, Feb. 01, 2022 (GLOBE NEWSWIRE) -- Bombardier (TSX: BBD.B) (the “Corporation”) today announced that it has received a letter dated January 31, 2022 (the “Letter”) from counsel to certain holders of 7.450% Senior Notes due 2034 (the “2034 Notes”), and has learned that such holders also filed a complaint before the Supreme Court of the State of New York (the “Action”), reiterating claims made in April 2021 substantially to the effect that the Corporation’s divestitures of non-core assets, including its transportation business, regional jet program and aerostructures division (the “Transactions”), constitute a breach of certain covenants under the indenture governing the 2034 Notes and further alleging that the actions of the Corporation in May 2021, addressing the matters raised in the April 2021 letter, breached the rights of such holders.

The Corporation believes that these allegations are without merit and intends to vigorously defend itself against the Action. The Corporation believes it is not and has never been in breach of any covenant under the relevant indenture and that the actions taken by it in May 2021, with the support and consent of the requisite holders of the relevant debt securities of the Corporation were fully compliant with the terms of the indentures under which such notes were issued. The Corporation also believes the actions it has taken enabled it to reposition the business, strengthen its balance sheet, accelerate de-leveraging and better position Bombardier for long term growth and value creation.

About Bombardier
Bombardier is a global leader in aviation, creating innovative and game-changing planes. Our products and services provide world-class experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.

Headquartered in Montréal, Canada, Bombardier is present in more than 12 countries including its production/engineering sites and its customer support network. The Corporation supports a worldwide fleet of over 4,900 aircraft in service with a wide variety of multinational corporations, charter and fractional ownership providers, governments and private individuals.

FORWARD-LOOKING STATEMENTS
Certain statements in this announcement are forward-looking statements based on current expectations. By their nature, forward-looking statements require us to make assumptions and are subject to important known and unknown risks and uncertainties. Please refer to our note on “Forward-Looking Statements” contained in our latest published quarterly report.

For Information

Francis Richer de La Flèche Vice President, Financial Planning and Investor Relations Bombardier +514 240 9649

Mark Masluch Senior Director, Communications Bombardier +514 855 7167

FAQ

What allegations are made against Bombardier regarding the 2034 Notes?

Bombardier faces allegations of breaching covenants connected to the divestiture of non-core assets as stated in a letter from noteholders.

How is Bombardier responding to the legal complaint filed in New York?

Bombardier intends to vigorously defend itself against the allegations, asserting that they are without merit.

What impact might the legal issues have on Bombardier's stock symbol BDRBF?

The legal challenges could potentially impact investor confidence and stock performance, but Bombardier believes it has acted in compliance with indenture terms.

What actions did Bombardier take regarding its business structure?

Bombardier has divested non-core assets to strengthen its balance sheet and position itself for long-term growth.