(Adds details on bank adviser)
By Allison Lampert
MONTREAL, March 17 (Reuters) - The Canadian government has
finished studying a request from struggling planemaker
Bombardier Inc BBDb.TO for $1 billion in aid and is preparing
to make an announcement within weeks, according to a source with
direct knowledge of the situation.
Bombardier wants the money to help finance its new CSeries
passenger jet, which faces tough competition from Airbus Group
SE AIR.PA and Boeing (NYSE:BA) Co BA.N .
The company is based in Quebec, which last October invested
$1 billion in the CSeries, and now both Bombardier and the
province want Ottawa to follow suit to help protect thousands of
well-paid aerospace jobs.
"The due diligence is done," the source said. "The
government is preparing to make an announcement in a matter of
weeks, not months."
Bombardier formally asked for federal help on Dec. 11, and
the two sides are still talking about what form possible aid
could take, the source added.
Prime Minister Justin Trudeau was quoted last month as
saying an announcement on Bombardier aid would come before the
March 22 budget. But Innovation Minister Navdeep Bains, who has
direct responsibility for the file, said on Monday that this was
not the case, throwing the timing of the decision into
uncertainty.
Asked for comment, Bains spokesman Philip Proulx said talks
between the two sides were continuing.
"There has been progress in the discussions, but a decision
has not been reached," he said.
Separately, the Globe and Mail reported on late on Wednesday
that the federal government had tapped Morgan Stanley (NYSE:MS) MS.N to
advise it on Bombardier's aid request.
Bombardier and Morgan Stanley declined to comment.
Senior government sources said last month that while Ottawa
was likely to offer some sort of aid to Bombardier, they did not
like the way the $1 billion Quebec deal was structured.
Quebec wants the CSeries venture to be spun off into a
separate entity, with Ottawa taking a one-third stake. This
would take the troubled 100-150 seat jet program off the
company's books and boost its short-term financial results.
The first of the CSeries jets is entering service in 2016
after years of delays. Bombardier has booked just 243 firm
orders. It currently controls 50.5 percent of the CSeries, while
Quebec has a 49.5 percent stake.
Under Quebec's proposal, if Ottawa matches the province's $1
billion contribution, both governments would own one-third
stakes in the CSeries, with Bombardier left with the remainder.
by James Dalgleish and Lisa Von Ahn)