Learjet Sale to Textron

Sale of Learjet to Textron

Learjet sales by an analyst from the Bombardier analyst group There are two financiers who believe that Bombardier could divest Wichita-based Learjet - possibly to its inter-airport rival. The Cowen & Co. researcher Cai von Rumohr said he thought the sale of Learjet would be possible and Cessna Citation's Textron Aviation could be the likely purchaser. Commenting after sending a message to early this month entitled "Increasing Potential For Lear Acquisition," his comment came to investor attention.

" Rumohr said in the memo that "disposal is becoming more and more possible" to reduce nearly $7 billion in Bombardier debts due between 2018 and 2023, and because Learjet has "no opportunities for growth" from the sale of the Learjet 70/75, the only jet it produces. Bombardier put both airplanes into operation at the end of 2013, and the only other airplane in progress, the Learjet 85, was washed by Bombardier last year.

"The first point is, if you killed Lear 85, you killed the future," von Rumohr said in an Interview this weekend. Business Bombardier aircraft spokesperson Mark Masluch said that the corporation makes no comments on gossip or rumor. Pugnacious commerce this faculty include state readiness to decision on the $13. 8 large integer award happening of the 75's Learjet, he same.

On Friday, Learjet was approached by senior management at Bombardier of its own free will by Friday to make a profit call to analysis in the second half of 2016, with commentary focusing on Learjet's poor delivery in the first half of 2016 - six aircraft versus 14 in the first half of 2015 - and competitive activity with other aircraft, which included price. "They clearly suggest that they are dissapointed with the way things are going (in the Learjet)," said von Rumohr.

While Masluch would not say whether Bombardier has adapted its Learjet output rates in the face of lower shipments this year, it goes without saying that they will be reviewed on an ongoing basis on the basis of market demands. Whereas von Rumohr estimated that Bombardier's Learjet services unit generated revenues of around $400 million, the global Learjet aircraft market of more than 2,300 will decline further over the course of the years if Bombardier does not plan a new Learjet aircraft type, which seems unlikely in the short run.

Because of its closeness to the Learjet, he believes Textron Aviation would be the most likely purchaser - Textron's western warehouse is on the eastern side of Wichita Eisenhower National Park, while Bombardier's Learjet factory is on the western side of the same. You manufacture nozzles in the same products class, and Textron is the only likely purchaser, he added.

Rumohr said Embraer's senior management said they were not interested in a Learjet canvass. Textron Aviation spokesperson said in an email that the airline does not make comments on rumours or speculations. Von Rumohr is not the only analytical firm who thinks candidly of a Learjet sale with Textron Aviation as a candidate. The JPMorgan researcher Seth Seifman also addressed both issues in his concluding review of Bombardier's profits, as reported Friday.

"Lear's futures have an impact on TXT (Textron), where Cessna is an important competitor," Seifman said this weekend. "Texttron is often cited as a prospective Lear purchaser, and we have no doubts that there would be interest, although it is not clear whether in this way, it would strengthen Bombardier's rival.

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