Bombardier Recreational Products Inc.: The Financing of a Private Company
This case study describes the financing plan for the privatization of Bombardier's Recreational Products Division in December 2003, and brings to issue the decision to either pay out a large dividend to the firm's equity sponsors or to repay outstanding debt one year following the privatization. The industry context, as well as the covenants included in the original loan agreements, serve as a backdrop to the decision that is examined.