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3 Apr 03. Bombardier Inc. (Toronto:BBDb.TO – News) unveiled a C$1bn ($680m) fourth-quarter loss and a sweeping restructuring program on Thursday as it struggles to cope with a sagging aviation sector and heavy debt.

In an widely expected overhaul, Bombardier, the world’s third-largest civil aircraft maker and No. 1 manufacturer of trains, will issue equity, sell assets and halve its dividend to shore up its balance sheet after taking some C$2bn of writedowns.

It lost C$1.05bn or 77 Canadian cents a share in the quarter ended Jan. 31, compared with a restated profit of C$77.6m or 5 Canadian cents a share, a year earlier. Revenue fell to C$6.7bn from C$7.8bn.

Bombardier took the big writedowns and revised earlier profits downward as it revamped the way it accounts for costs and sales in its aircraft division and took writedowns on used aircraft and inventory. For the year, Bombardier lost C$615.2m, or 47 Canadian cents a share, after charges of C$1.3bn. That compared with a restated net income of C$36m, or 1 Canadian cent a share, a year earlier. Annual revenues were C$23.7bn versus C$21.8bn.

Bombardier said it will offer at least C$800m ($544m) of equity and sell assets, including its recreational products division, which makes Ski-Doo snowmobiles and Sea-Doo watercraft, to raise another C$1.5bn.

Founded in 1942 to make the precursor of the snowmobile, Bombardier has been publicly traded since January 1969. It vaulted into the aerospace sector with the acquisition of business jet maker Canadair from the Canadian government in 1986 and now employs 75,000 people in 25 countries. The company said it was cutting dividends on its class A and B shares by about half and the sale of two non-core assets — its defense services division and Belfast City Airport — was under way.

Bombardier, controlled by the family of late founder J. Armand Bombardier and current Chairman Laurent Beaudoin, said it will refocus on aerospace and transportation, but trim its Bombardier Capital unit to operate in two categories.

Paul Tellier, who took the helm as president and chief executive less than three months ago, said the writedowns cut some C$2bn from Bombardier’s C$4.7bn of equity. It had been a “difficult” three months negotiating terms with the company’s banks in North America and Europe. The proposed issue of class B shares will bolster the balance sheet and working capital, the company said.

Bombardier said it had C$5.7bn of short-term capital at Jan. 31, up C$898m from a year earlier. Its lenders eased the debt-to-capitalization ratio covenant for two key credit facilities to 70 percent from 50 percent for the first quarter and then 60 percent for the second and third quarters of this year.

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