Ottawa lends Bombardier C$173 million for SAS deal

OTTAWA Aug 5 (Reuters) - The Canadian government will lend C$173 million ($160 million) to Bombardier Inc (BBDb.TO) to help it fill an order for up to eight airplanes from Scandinavian airline SAS (SAS.ST), the government said on Wednesday.

The financial support is conditional on an agreement being reached between the government's export credit agency, Export Development Canada (EDC), and SAS on the terms and conditions of the sale of the Q400 and CRJ900 aircraft.

"EDC is providing repayable loans to ensure the aircraft production sector remains strong during this economic downturn," Industry Minister Stockwell Day said in a statement.

The loan will be made under a special government account for transactions that are considered to be in the national interest but do not necessarily meet the risk requirements for a regular corporate loan from EDC.

Bomardier shares, which gained about 10 percent in the past month, were up 0.12 percent on Wednesday at C$4.02 after touching a high of C$4.09 earlier in the day.

($1=$1.08 Canadian) (Reporting by Louise Egan; editing by Peter Galloway)