MONTREAL — Bombardier Inc. has concluded a $260-million private placement in a bid to resolve a complaint that it breached debt covenants by selling its railway and commercial aircraft businesses.

The business jet maker says it issued 7.45 per cent senior notes to an accredited institutional investor at par that now represents 51 per cent of the outstanding 2034 notes.

The debt is the same series held by an investor who last month alleged Bombardier was breaching its covenants.

The Quebec aircraft manufacturer called the allegation "without merit" but decided to seek the consent of other holders of debt to clarify that the asset disposals are permitted.

It received consent from a majority of bond issues but hadn't secured majority support on the 2034 notes.

The unidentified investor has agreed to provide that consent for these notes, apparently settling the matter.

"If you can't beat them, dilute them," wrote Chris Murray of ATB Capital Markets.

This report by The Canadian Press was first published May 18, 2021.

Companies in this story: (TSX:BBD.B)

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