UPDATE 2-Bombardier moves to boost margins; cancels bizjet orders, sales tie-up

(Recasts, adds details and background)
By Euan Rocha and Amrutha Gayathri
Jan 13 (Reuters) - Canadian planemaker Bombardier Inc
BBDb.TO said on Wednesday it was ending a decades-long
business jets sales tie-up with a partner in the Middle East and
separately cancelling two dozen firm orders for its larger
Global business jets, as it moves to improve long-term
profitability.
The Montreal-based company's move to cancel 24 firm orders,
along with an additional cancellation of 30 optional orders for
its larger Global jets comes as a bit of a surprise given the
company's recent woes.
The embattled plane and train maker said, however, that it
is confident that it could resell those business jet order slots
at improved margins.
The Canadian company has seen its share price tumble more
than 72 percent in the last two years, as its long-delayed and
billions of dollars over-budget CSeries jet program has left the
company shuddering under a massive debt load.
The initial variant of the CSeries narrow-body commercial
jet just won certification from Canadian regulators last month,
shortly after the government in Bombardier's home province of
Quebec vowed to make a $1 billion cash infusion in return for a
nearly 50 percent stake in the CSeries program.
In November, Bombardier also agreed to sell a 30 percent
stake in its rail business to Quebec's public pension fund
manager for $1.5 billion, in a bid to bolster its balance
sheet.
Bombardier said on Wednesday it would start selling directly
to customers in the Middle East and North Africa and that it has
ended a tie-up with TAG Aeronautics, the long-time exclusive
sales representative for its Challenger and Global business jets
in the region.
Bombardier will record charges of $278 million in the fourth
quarter on the move and separate cancellation of the business
jet purchase orders, the company said.
"Longer-term, this announcement should be positive," noted
Desjardins analyst Benoit Poirier, adding that it would help the
segment reach an 8 percent to 10 percent EBIT (earnings before
interest and taxes) margin range by 2020.
The company said it plans to focus on interacting directly
with its customers as part of a change in its strategic business
plan in the Middle East and Africa.
"Bombardier is firmly committed to the Middle East and
Africa, and our in-region sales team is well equipped to ensure
all customers find the ideal business jet for their needs," said
Bombardier's business jet head David Coleal, in a statement.