Bombardier president and chief executive officer Alain Bellemare has confirmed that it is preparing for an initial public offering (IPO) of a minority stake in its rail business Bombardier Transportation.

In a statement, Bellemare said: "Finally, we are announcing today that we are preparing for an initial public offering of a minority stake in Bombardier Transportation.

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"Bombardier Transportation is not for sale."

"Let me be very clear, Bombardier Transportation is not for sale. We like this business and it will remain part of Bombardier Inc."

Bombardier said it had been proactively reviewing its strategic options for its rail business, given the ongoing industry consolidation.

The IPO is planned for the fourth quarter of this year, subject to market conditions, with the primary listing likely to be in Germany.

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Following completion, the IPO is expected to crystallise the full value of Bombardier Transportation and further strengthen the corporation’s financial position, while preserving flexibility should it wish to participate in future rail equipment industry consolidation.

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Bombardier said that the rail business will continue to be controlled by the parent company after the IPO and will be consolidated in its financial results.

In February, Bombardier Transportation and the New United Group (NUG) finalised their agreement to establish a new 50-50 joint venture (JV) for signalling and rail control in China.

The new firm, Bombardier NUG Signalling Solutions Company, will focus on rail transportation communication, signalling and integrated monitoring systems for the Chinese mass transit and light rail markets.