the end of a CANADIAN icon.
 

The company that made the original SKIDOO and SEADOO is about to sell off that division.

Yet another piece of Canadiana sold to the highest bidder....probably to one of the automakers....

* sigh *

****************************************
Bombardier unveils 'recovery' plan, sale of Ski-Doo division
Last Updated Thu, 03 Apr 2003 14:02:23
TORONTO - Bombardier (TSX:BBD.b) unveiled a sweeping "recovery" plan Thursday that will see the sale of its recreational products division ? the foundation of the business.


The big shake-up comes as the company reported a net loss of just over $1 billion in the final quarter of the year, as revenues sank 15 per cent to $6.7 billion.

The most notable of Bombardier's changes will be the sale of the recreational products unit, which dates back to 1942. The 7,500-employee division makes Sea-Doo personal watercraft and the Ski-Doo brand of snowmobiles. The sale is expected to bring in $1.5 billion.

The Bombardier family, the company's controlling shareholders, have expressed an interest in joining with other investors to buy the recreational products group ? what the family called a "heritage" asset.

The Bombardier family owns just under 22 per cent of Bombardier's shares and just over 60 per cent of the voting rights. That made it difficult to propose the sale of the division on which the company was built, Bombardier president and chief executive officer Paul Tellier said during a press conference.

"Getting the support from the family to sell (what) many would see as the jewels of the family, it was a tough decision for them to take and it was a tough proposal for me to make," Tellier said.

CBC ARCHIVES: Bombardier: The Snowmobile Legacy

For the full 2003 fiscal year, Bombardier said it lost $615.2 million (47 cents a share). The loss included a $1.3 billion special charge. Last year, the company made a profit of $36 million (1 cent a share).
Bombardier also slashed its quarterly dividend from 4.5 cents a share to 2.25 cents a share.

Shares of Bombardier rose after the announcement. The stock was up 36 cents to $3.60 at 2:02 p.m. ET.

Bombardier's stock has fallen from a 52-week high of $15.24 last May and was trading above $20 just before the Sept. 11 attacks. Those attacks caused a number of airlines to cancel or delay orders for Bombardier's jets as air travel declined and never fully recovered. It announced 3,000 layoffs at its aerospace division in early March.

Other changes the company announced Thursday include:

An $800-million equity offering;
The sale of non-core assets, including its defence services unit and Belfast City Airport in Northern Ireland;
An amendment to its net debt-to-capitalization ratio covenant, a move Bombardier said will give it more financial flexibility;
Curtailing the activities of Bombardier Capital. The division will stop railcar leasing, focusing now on financing for Bombardier's regional aircraft;
The creation of a corporate governance and nominating committee to monitor the evolution of corporate governance principles. The company said its executive committee of the board will be abolished;
Accounting policy changes that resulted in a $1 billion charge in the company's 2003 fiscal year.
"We will rebuild our credibility with investors with the action plan we are announcing today," Tellier said in a statement.
"The sale of our recreational products business provides a good balance between our asset divestitures and the equity offering. Combined with our cost reduction programs, it gives us the financial flexibility we need going forward," Tellier said.

Tellier's shake-up comes barely three months after he assumed the top job at Bombardier. He was hired away from CN (where he was also CEO) and immediately promised major changes to restore investors' confidence.

Tellier's sweeping changes were not enough to prompt a positive response from one debt-rating agency. Standard & Poor's said it was leaving the company's long-term credit rating on watch with negative implications. S&P currently has its rating on Bombardier at 'BBB-', which is one step above 'junk' status.

"The charges and resultant net loss, while very substantial, were factored into the current ratings," Standard & Poor's credit analyst Kenton Freitag said in a report.

Bombardier is the world's biggest maker of rail equipment and is one of the biggest manufacturers of regional jets.