It’s official. Bombardier Inc. (T.BBD.B) is being removed from the S&P/TSX Composite Index as the company’s share price languishes.
After much speculation, the S&P Dow Jones Indices announced the decision to remove the Canadian airplane and train manufacturer late Friday afternoon, with Bombardier headlining a list of 14 companies that will be removed from the index as of June 22.
Other names on the list include cannabis producer Hexo Corp. (T.HEXO), food court giant MTY Food Group Inc. (T.MTY), and oil and gas producer Baytex Energy Corp. (T.BTE)
Numerous factors determine a stock's eligibility for inclusion in the composite index, including market capitalization and trading liquidity. Bombardier shares have lost 73.6% of their value this year and haven't traded above $1 since March 3.
The Montreal-based industrial firm has undergone a multi-year overhaul that saw it hand away control of its C-Series jet program to Airbus SE as it gets out of commercial aerospace activities to focus on its business-jet operations. Earlier this year, Bombardier reached a deal to sell its rail business to Alstom SA.
Bombardier has also faced a leadership change recently after Alain Bellemare — who had been spearheading Bombardier's turnaround efforts — resigned. The company hired former Hydro-Québec Chief Executive Officer Éric Martel as its new CEO as of April 6.
Earlier this month, Bombardier's aviation business announced plans to slash 2,500 jobs as a result of a sharp downturn in demand for its business jets amid the COVID-19 pandemic.
In addition to being removed from the composite index, S&P Dow Jones Indices said Bombardier will join BlackBerry Ltd. (T.BB) in being dropped from its TSX 60 Index on June 22. Algonquin Power & Utilities Corp. (T.AQN) and Canadian Apartment Properties REIT will take their positions in the group of 60 large-cap companies.
