Bombardier Inc.’s shares fell below C$1, the latest blow for the iconic Canadian manufacturer as it buckles under $9 billion in debt.
The 2 percent drop Wednesday in Toronto added to the 25 percent decline the shares sustained this year through Tuesday. The rout raises the prospect that the aircraft maker will be thrown out of the main Canadian stock gauge — a development that would bring additional pressure by forcing index funds to sell their holdings.
Investors have abandoned the shares as the 73-year-old company struggles with the development of the C Series, a jet with as many as 160 seats that is two years late and more than $2 billion over budget. Originally a snowmobile maker, Montreal- based Bombardier grew into a train and aircraft maker that is credited with inventing the regional jet in the 1980s.
The company’s widely traded Class B stock dropped to 99 Canadian cents at 3:21 p.m. in Toronto, its lowest intraday level since 1991. Bombardier’s 68 percent tumble last year made it the sixth-worst performer this year among members of Canada’s benchmark Standard &Poor’s/TSX Composite Index.
A stock must have an average price of at least C$1 for the previous three months to remain in the S&P/TSX index after each quarterly review, according to Tony North, senior manager of equity markets for S&P Dow Jones Indices.
Bombardier now has a market value of about C$2.28 billion ($1.62 billion). That’s equivalent to almost 23 units of the CS300 — the company’s largest aircraft model, which carries a list price of $72 million.
The family of founder Joseph-Armand Bombardier controls the company through their Class A shares, which carry 10 votes each.
The planemaker now estimates that the C Series will cost $5.4 billion. While working on the C Series, Bombardier has seen sales of its CRJ family of regional jets lag behind those of Embraer SA, which are being fitted with new engines.
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