After months of negotiations, Bombardier is set to close a deal to sell the rail division to French manufacturer Alstom.
Bart Demosky, the new CFO of Bombardier, enters the Canadian group’s C-suite just as it is shedding its rail division—adding a twist to the 54-year-old’s career, which since 2013 had been in the railroad industry.
After months of negotiations, Bombardier is set to close a deal to sell the rail division to French manufacturer Alstom on January 29 for about $4 billion in net proceeds. Leadership will then be able to concentrate on its preferred segment, manufacturing business jets.
That’s where Demosky’s financial expertise is needed—although much of his previous experience was logged at Agility Rail, Universal Rail Systems and Canadian Pacific Railway. Montreal-based Bombardier accumulated a large debt load in pursuit of three costly business-jet research and development projects. The sale of the rail division is intended to alleviate the financial burden, but Bombardier will still have $4.5 billion of debt to service. By negotiating the renewal of its loans in good standing, Demosky aims to pilot the company’s transition to a pure business-jet manufacturer.
In announcing the appointment, CEO Eric Martel praised Demosky’s “impressive track record of success at some of Canada’s largest corporations,” which will come in handy as he works to rejigger Bombardier’s obligations. The new CFO has had senior roles at two big publicly traded companies, knows his way around the big banks and has already led transformation efforts at Suncor Energy and Canadian Pacific.
Demosky’s corporate experience will also help him in confronting interrogations by the UK Serious Fraud Office. The agency is currently investigating Bombardier on suspicion of bribery related to deals with airline Garuda Indonesia. The CFO will stay busy.