MONTREAL (Reuters) - Canadian plane and train maker Bombardier Inc (TO:BBDb) forecast positive cash flow for 2020 after it agreed to sell the remaining stake in its capital-intensive commercial aircraft program to Europe's Airbus (PA:AIR).
The deal, which gives Airbus a 75% share and the Canadian province of Quebec a 25% stake in the A220 jetliner program, allows Bombardier to avoid future investments of about $700 million.
Bombardier will receive about $600 million from Airbus, helping lift its cash flow, which was a negative $1.20 billion in 2019.
The company's loss before interest and taxes was $1.70 billion in the fourth quarter ended Dec. 31, compared with a profit of $342 million a year earlier, partly due to charges related to some rail contracts in Europe.
Bombardier also said it took a $1.6 billion charge in 2019 related to the Airbus jetliner partnership. The company said in January that it might have to write down the value of the plane partnership with Airbus.
Bombardier is now weighing sales of its remaining units to shore up its financial footing as it faces higher rail costs and $9.7 billion in outstanding bonds according to Refinitiv data.