April 3, 2003 -- Bombardier President and Chief Executive Officer Paul M. Tellier is launching a major recapitalization program that includes divesting the company's Recreational Products division, which Tellier said was the most liquid asset in Bombardier's portfolio, the company announced in a Thursday, April 3 statement.
The divestiture is one of several initiatives designed to strengthen the company's balance sheet and refocus the corporation on the aerospace and transportation businesses.
"We will rebuild our credibility with investors with the action plan we are announcing today," said Tellier. "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."
The corporation said it has retained UBS Warburg as financial advisors and Ogilvy Renault as its legal advisors for the sale of its recreational products business.
The controlling shareholder supports the corporation's plan to unlock the value of the recreational products group at this time, the company added.
Bombardier family seeks to acquire rec. business
In order to help ensure the stability and continuity of this heritage asset, members of the Bombardier family have expressed an interest in participating in the process as part of an eventual group of investors seeking to acquire the recreational products business, the company reported.
In view of the family's interest, the board has formed a committee of independent directors to supervise and monitor the divestiture process, evaluate offers or other alternatives and make recommendations to the board. The independent committee is chaired by L. Denis Desautels, former Auditor General of Canada, and composed of Jalynn H. Bennett, André Desmarais, Jean C. Monty and James E. Perrella.
The committee will be responsible for ensuring that the best interests of the corporation and all of its shareholders are served, according to Bombardier. The committee will also ensure that the process is conducted in a manner that maintains the full value of the business during the divestiture process.
The independent committee of the board has retained Morgan Stanley as its financial advisors and McCarthy Tetrault LLP as its legal advisors.
The recreational division includes Johnson and Evinrude outboard engines, personal watercraft, sport boats, snowmobiles and all-terrain vehicles.
Recreational Products division confident about the future
In a separate statement today, Bonbardier's Recreational Products division stated its confidence in its future.
"Indeed, because of our profitability, the quality of our assets and our international reputation as a leader in most of our markets, Bombardier Recreational Products is very attractive to investors," the division acknowledged.
"With the growth and success experienced over the recent years, we are well positioned to compete on our own and to become even more successful," the division said. "Our group offers the best product line-up in the market, manufactured by a highly creative, competent and motivated group of employees making important contributions to their communities world-wide."
The division also expressed that it is "business as usual" in all its operations.