Mitsubishi Heavy Industries (MHI) has completed the acquisition of Bombardier’s CRJ Series regional jet. The purchase cost Mitsubishi a cash consideration of close to $550 million. However, this is subject to post-closing adjustments, and the assumption of liabilities by MHI related to credit and residual value guarantees and lease subsidies. These amount to approximately $200 million.
Therefore, MHI acquires the maintenance, support, refurbishment, marketing, and sales activities for the CRJ Series aircraft. These include related services and support networks located in Montréal, Québec, Toronto, and Ontario. It will also apply to its service centers located in Bridgeport, West Virginia, and Tucson, Arizona.
The agreement also transfers Bombardier’s net beneficial interest in the Regional Aircraft Securitization Program (RASPRO) to MHI. The interest is valued at approximately $170 million,
Nevertheless, Bombardier will continue to supply components and spare parts and will assemble the remaining 15 CRJ aircraft in the backlog as of 31st March 2020 on behalf of MHI.
However, Bombardier retains certain liabilities representing a portion of the credit and residual value guarantees totaling $288 million as of 31st March 2020, payable by Bombardier over the next four years.
This acquisition, initially announced in June 2019, is complementary to MHI’s existing commercial aircraft business, in particular the development, production, sales, and support of the Mitsubishi SpaceJet commercial aircraft family.
Bombardier is a Canadian multinational manufacturer of business jets and rail, with its headquarters in Montréal, Canada. It manufactures several series of corporate jets: Global 7500, Global Express, Challenger 600, Challenger 300, and Learjet 70/75. The company has production and engineering sites in over 25 countries across the segments of Aviation and Transportation. Its shares are traded on the Toronto Stock Exchange.
In the fiscal year ended 31st December 2019, Bombardier posted revenues of $15.8 billion.
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