Bombardier sees delays in joint-venture with Russia's Rostec
TORONTO (Reuters) - Canadian plane and train maker Bombardier Inc (BBDb.TO) said on Friday that possible sanctions by Canada and other western countries against Russia probably will delay its planned joint-venture deal with Rostec, the Russian state-owned industrial and defense conglomerate.
The United States, Canada and European Union are in the process of imposing sanctions on Russian President Vladimir Putin's close allies over the annexation of Ukraine's Crimea and have warned of more moves that would target major sectors of the Russian economy.
"We are in discussions, however at a slower pace. This is as a result of the current situation. So it's highly probable that there will be a delay in reaching a definitive agreement," said Marianella de la Barrera, a spokeswoman for Bombardier.
Bombardier, which is also negotiating the sale of 100 short-haul Q400 NextGen aircraft as part of the agreement, is now also expecting potential delays in finalizing that deal.
"We can't speculate on the amount of the delay or what will happen. We're taking very frequent pulse checks on the situation and staying very close to our government relations folks," said de la Barrera.
Bombardier, in August, had reached a preliminary deal around the Q400 aircraft sales - potentially worth up to $3.4 billion, based on list prices - and a joint-venture assembly line for the aircraft in Russia. The tentative agreement involved Rostec and Moscow-based leasing firm Ilyushin Finance. The aircraft sales are contingent on establishing an assembly line for the aircraft in Russia.