Risk partners take on risk, right? I don't know that the Quebec Pension fund took on any more than 49% of the risk, so by my weak math skills, that's not 100% of the risk.
It's not the Quebec pension fund, but the Quebec government (i.e., all Quebec taxpayers) which invested 49.5% in the CSeries.
But that does NOT mean that Quebec will see equitable rewards to the investment's risk profile. That is because there are provisions in the deal allowing Bombardier to "buy back" the shares at any time at a fixed interest rate.
So really Quebec's "investment" is more an unsecured loan. Using the loan analogy, if the CSeries goes bust the "loan" goes in default and Quebec gets nothing. If the CSeries makes any money, Bombardier simply "pays off" the loan at the fixed interest rate.
Quebec will never see the big upside, just the potential downside of losing everything. All the risks, little of the rewards.
From an pure financial perspective the "investment" is worse than buying junk bond at Bombardier's credit rating.
Another deal like Delta means Bombardier will LOSE another $300 million. Revenues mean zilch when you're selling at negative margins!!
And I think Bombardier must continue to close key contracts at negative or zero margins for the next couple of years, although Embraer is keen to make that a little more difficult:
Embraer: Bombardier’s Delta CSeries order enabled by unfair subsidies
Embraer Commercial Aviation president and CEO Paulo Cesar Silva has alleged that Bombardier won an order from Delta Air Lines for the CSeries based on improper government subsidies. ...
“Of course, we win and lose deals in the market,” Silva said. “My remarks and my complaint are given [because of] the way we lost this campaign.” ...
Silva said Embraer is considering its legal options: “We are looking at the alternatives that we have in order to act against this. Could be the WTO, for instance.”
Complete article:
Embraer: Bombardier's Delta CSeries order enabled by unfair subsidies