Spirit cuts purchase price for Bombardier aerostructures unit as COVID-19 hits industry

(Reuters) - U.S. aircraft parts maker Spirit AeroSystems (SPR) said on Monday it reached a deal with Bombardier Inc (BDRAF) to cut the cash component of a deal to buy the Canadian planemaker's aerostructures unit by 45% to $275 million as COVID-19 weighed on the aerospace sector.

The revised deal, expected to close on Oct. 30, sent Spirit AeroSystems (SPR) shares down 7% while Bombardier stock edged 2.3% shares higher in midday trading.

Spirit caused jitters among Bombardier investors in late September when it raised uncertainty over the deal's closing.

Montreal-based Bombardier is shedding assets amid broader plans to become a pure-play business-jet maker, and pay down some of its $9.3 billion in debt.

The two companies first agreed to a deal in 2019.

Bombardier said in a statement on Monday that Spirit would now assume at least $824 million in liabilities. Bombardier said in October 2019 that the U.S. company would assume at least $700 million in liabilities under the original deal.

Spirit said separately that its liabilities were unchanged and the total enterprise valuation of the unit stood at $865 million, down from a prior $1.09 billion.

The revised agreement includes a facility in Belfast which produces wings for Airbus SE's A220 jet, which is considered politically sensitive as the largest high-tech manufacturer in Northern Ireland.

In September, French train maker Alstom SA lowered its offer to acquire Bombardier's rail business by $350 million, in a deal to create the world's second-largest rail company by next year.

Bombardier's restructuring comes amid broader turmoil in the aerospace sector because of the pandemic, which has grounded flights across the globe, weakened valuations and some companies' appetite for deals.

Earlier this month, Air Canada slashed its price to buy Canadian tour operator Transat A.T. Inc by nearly 75% as the coronavirus pandemic weighs on travel demand.

(Reporting by Allison Lampert in Montreal and Ankit Ajmera in Bengaluru; Editing by Shinjini Ganguli, Bernadette Baum and Cynthia Osterman)

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