Bombardier has reached agreements to sell its assembly site at Downsview near Toronto and open a new Global business jet assembly site at Toronto Pearson International airport.
"As part of Bombardier's five-year turnaround plan, we have been reviewing our facilities worldwide to ensure we have the most-efficient and cost-effective operations necessary to support our growth objectives," Bombardier chief executive Alain Bellemare said during the company's first-quarter earnings call today.
Bombardier had previously expressed interest in divesting Downsview, and now confirms it will sell the property to Canada's Public Sector Pension Investment Board for $635 million.
Accounting for transaction and other costs, the deal will pump $550 million into Bombardier's cash reserves, it says.
"This cash infusion significantly strengthens our balance sheet," Bellemare tells investors.
The company expects that the sale will close in the second quarter.
But Bombardier will operate the site up to three years after closing, and has options to remain at Downsview for two years after that, it says.
Bombardier assembles Q400 turboprops and Global business jets at Downsview, a site surrounded by dense development about 14km from downtown Toronto.
The site had previously been operated by de Havilland Canada and has operated for about 80 years.
Bombardier says it uses only 10% of the Downsview real estate.
While it will exit Downsview, Bombardier has reached an agreement to lease 15 hectares (38 acres) at the Toronto Pearson International airport, where it will open a new Global business jet final assembly plant, Bombardier says.
Bombardier has not articulated post-Downsview plans for its Q400. The company has 55 outstanding Q400 orders, it says.
Asked about the Q400's future, chief financial officer John Di Bert notes that Bombardier has as long as five years to form a plan.
"We will look at the overall footprint… and make the right decisions about how and where we will drive production for the Q," he said during the earnings call.
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