Alstom says concerned about finances of Bombardier rail unit, but takeover is likely to happen

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French rail giant Alstom SA warns that problems within Bombardier’s rail division could affect negotiations to buy it, but says it still plans to continue the buyout operation.Alstom claims that the “negative developments” around the operations and finances of the rail unit revealed in Bombardier’s quarterly report last week have prompted the potential buyer to “consider the consequences” in upcoming discussions.

On Thursday, Bombardier reported an additional charge of US $ 435 million on its rail business, largely related to costs of end-stage projects in the UK and Germany.

At the end of last month, the European Commission gave the green light to Alstom’s $ 8.2 billion purchase of the Bombardier train unit following an investigation which found the operation raised serious competition problems, which led to a significant improvement in Alstom’s commitments, according to the European competition authorities.

A spokesperson for Bombardier said it is abiding by all of the terms of the deal and will continue to work on signing the final deal as soon as possible.

The sale, which would help alleviate Bombardier’s US $ 9.3 billion debt, was initially scheduled to close in the first half of 2021.

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