Triumph Group, Inc. ( NYSE:TGI ) announced today that it has entered into a definitive agreement to transfer the Global 7500 program (the “transition” or “agreement”) to Bombardier (TSX:BBD.B). Under the terms of the agreement, Triumph will transition responsibility for the Global 7500 wing manufacturing operations and assets to Bombardier.
Over the past five years, Triumph collaboratively matured the wing design and supply chain of the Global 7500 business aircraft and delivered more than 26 production wings to Bombardier’s Final Assembly Line. The December 2018 entry-into-service of the segment-leading Global 7500 marks the successful development of this program.
“This agreement is a pivotal step in our transformation as we continue our focus on our core Integrated Systems and Aftermarket offerings and our goal of achieving predictable profitability. This transition in our portfolio enhances our free cash flow and margins in FY’20 and beyond. We’re proud of our work to date on the Global 7500 program and we will continue to support Bombardier throughout its portfolio,” said Dan Crowley, President and CEO of Triumph Group.
To ensure a seamless transition, the companies agree that Bombardier will continue to operate the program’s production line at Triumph’s Red Oak, Texas facility and Triumph employees currently operating the Global 7500 production line in Red Oak will continue in their roles upon completion of the transition.
The transition, which is subject to certain closing conditions, is expected to close in the first calendar quarter of 2019. Under the terms of the agreement, Bombardier will assume the program’s assets and obligations upon closing. The transition is expected to have a positive impact on Triumph’s fiscal year 2020 cash flow. Additional details around the financial impact will be discussed during Triumph’s third quarter earnings call.
Source: Triumph Group, Inc.
Date: Jan 24, 2019