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Bombardier's CS300 Aircraft sits in the hangar before its test flight in Mirabel, Que.Christinne Muschi

Bombardier Inc. is raising $638-million in its first share issue in more than three years, taking advantage of recent sharp gains in the plane and train maker's stock to beef up its balance sheet.

Montreal-based Bombardier is issuing equity following a series of wins on the manufacturing and trade fronts, including an agreement with Airbus Group SE that rescued its marquee C Series commercial jet program and a U.S. trade ruling that scrapped massive duties on the aircraft.

The company is issuing 168 million class B subordinate voting shares in a bought deal led by Credit Suisse Securities, National Bank Financial Inc., UBS Securities Canada Inc. and TD Securities Inc. The shares are priced at $3.80 each. In the past year, the stock has traded as low as $1.96.

Bombardier closed at $4 on the Toronto Stock Exchange on Monday. Underwriters have an option to buy up to 25.2 million more shares for up to 30 days after closing, boosting the take to $734-million.

The company said it plans to use net proceeds from the offering to bolster its cash position and improve its balance sheet under the company's five-year turnaround plan under chief executive Alain Bellemare.

The initiative appears to be putting the heavily subsidized manufacturer on more solid financial footing. Last month, Bombardier reported that it narrowed its net loss for the fourth quarter, boosting revenue and free cash flow owing to strong performance in its rail segment.

The stock issue follows Bombardier's deal with Airbus for the C Series jet program, which had been a drain on the company's cash resources. Under the deal, announced in October, Airbus gets a 50.01-per-cent stake in the partnership behind the C Series passenger jet and takes over procurement, sales and marketing.

Since the agreement with Airbus was announced, shares in Bombardier have climbed nearly 70 per cent, reflecting increasing investor confidence in the company's long-term survival following years of cost overruns and delays in the C Series.

Before this, Bombardier's most recent equity offering came in 2015, after the company named Mr. Bellemare as CEO and also halted its dividend. Despite the uncertainty from these events, investors jumped at the deal, enticed by a large discount.

Bombardier sold shares at $2.21 each, a 10-per-cent discount to the market price. Within a few hours, the order book was roughly double the size of the offering, and U.S. orders accounted for almost 40 per cent. However, buyers of this offering suffered for years.

Bombardier's shares tumbled, bottoming out around 80 cents in February, 2016. It took almost two full years from the equity financing for the stock price to recover to the offer price.

At the time of the deal, some people believed a major institutional investor would need to show its support in order for other investors to have the confidence to buy in. Given Bombardier's Quebec roots, the Caisse de dépôt et placement du Québec was viewed as the logical player to step up in this fashion. Yet, a skirmish between the pension giant and Bombardier prevented the Caisse from doing so.

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