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https://www.ch-aviation.com/portal/news/79322-mitsubishi-acquires-crj-line-production-to-end-in-2h20

Mitsubishi acquires CRJ line, production to end in 2H20

26.06.2019

Mitsubishi Heavy Industries (MHI) has announced it will acquire the CRJ Series of aircraft from Bombardier Aerospace for a cash consideration of USD550 million. Once concluded, the deal will mark the Canadian manufacturer's exit from the largescale commercial aircraft sector leaving only its business aviation unit - Bombardier Business Aircraft - intact.

The two firms said in a joint statement that MHI will acquire the CRJ Series' maintenance, support, refurbishment, marketing, and sales activities including its Montréal and Toronto services and support networks as well as its service centres located in Bridgeport, West Virginia, and Tucson Int'l, Arizona.

Although the deal includes the CRJ-100, CRJ-200, CRJ-700, CRJ-900, and CRJ-1000's type certificates, Mitsubishi said it will not be continuing with their production.

"The CRJ production facility in Mirabel, Québec will remain with Bombardier," it said. "Bombardier will continue to supply components and spare parts and will assemble the current CRJ backlog on behalf of MHI. CRJ production is expected to conclude in the second half of 2020, following the delivery of the current backlog of aircraft."

According to Bombardier's Program Status Report for March 31, 2019, the only remaining outstanding CRJ orders are for fifty-one CRJ-900s namely American Airlines (15), Chorus Aviation (9), CIB Leasing (5), Delta Air Lines (12), Uganda Airlines (4, of which two have been delivered), and undisclosed customer(s) (6). The breakdown does not include the proposed CRJ-700 derivative, the CRJ-550, for which United Airlines was named launch customer in February with up to 25 due this year and next year.

MHI said it will use the CRJ line's production, sales and support, and maintenance and engineering infrastructure to bolster its Mitsubishi Aircraft Corporation unit's own line of regional jets - the SpaceJet - whose constituent types include the MRJ70 (now the M100) and the MRJ90 (now the M90).

“The CRJ program has been supported by tremendously talented individuals. In combination with our existing infrastructure and resources in Japan, Canada and elsewhere, we are confident that this represents one effective strategy that will contribute to the future success of the Mitsubishi SpaceJet family. MHI has a decades-long history in Canada, and I hope this transaction will result in the expansion of our presence in the country and will represent a significant step in our growth strategy,” Seiji Izumisawa, President & CEO of Mitsubishi Heavy Industries Ltd., said.

As part of the deal, MHI will assume liabilities of around USD200 million as well as Bombardier's net beneficial interest in the Regional Aircraft Securitization Program (RASPRO), a vehicle that provides financing in the form of long-term leases to CRJ customers, valued at approximately USD180 million. Bombardier will also retain certain liabilities representing a portion of its credit and residual value guarantees which amount to approximately USD400 million. This amount, which is fixed and not subject to future changes in aircraft value, is payable by Bombardier over the next four years.

The transaction is currently expected to close during the first half of 2020 and remains subject to regulatory approvals and customary closing conditions.

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