(Adds context, updates stock, analyst comments)
By Allison Lampert
MONTREAL, Oct 16 (Reuters) - Canada's Bombardier Inc is continuing to look at strategic options for its aerospace division but no deal is imminent, people familiar with the matter told Reuters on Monday, as the company seeks to shore up sales and improve finances.
As part of that process, the Canadian train-and-plane maker has held informal talks with Chinese companies among others in recent months, but the sources played down the chances of Europe's Airbus being a likely partner.
On Sunday, Bloomberg reported that Bombardier was considering disposal of aerospace assets including its Q400 turboprop and CRJ regional-jet unit, while looking at partnerships with other aerospace companies, with Airbus among the prospective buyers.
Bombardier's talks with Chinese companies are aimed at delivering an investment in the company's 110 to 130 seat CSeries jets and improving the aircraft's sales through better access to the fast-growing Chinese aviation market, two sources familiar with the matter told Reuters earlier this autumn.
The company has guided for a $400 million loss in commercial aircraft this year, but has set a breakeven target for 2020.
The sources declined to be identified as the discussions are confidential.
"A CSeries JV with the Chinese is an option we have long contemplated," wrote Credit Suisse analyst Robert Spingarn in a note to clients on Monday.
"Canada would contribute a share of the program, allowing China to access first rate aerospace technology. China would contribute capital and likely place a major order for the aircraft."
Bombardier has been pushing for CSeries orders with carriers like China Southern and Canadian Prime Minister Justin Trudeau is expected to visit China in December.
Investment talks have been complicated, among other reasons, by the presence of various stakeholders, including the Quebec provincial government, which acquired a 49 percent stake in the plane program for $1 billion in 2015. The deal gives Quebec a say in any other potential investor in the CSeries program and Bombardier must keep its corporate head office in Montreal.
What is more, any deal involving the sale of aerospace technology to Chinese buyers would need the approval of Canada's federal government and Bombardier's founding family, which holds a controlling stake in the company through its dual class structure.
A deal with an outside investor could allow Bombardier to repurchase the Quebec stake in the CSeries, which could eliminate the subsidy issue, Spingarn wrote.
Bombardier was not immediately available for comment on Monday, and had declined to comment on Sunday. Airbus declined to comment.
Bombardier has been looking at strategic options for its aerospace division since 2015, when it held talks with Airbus for a majority stake in the company's CSeries jet. But those discussions ended without a deal, Reuters reported then.
Bombardier's aerospace division has been under pressure because of lackluster demand for its turboprops and regional jets, and more recently because of a trade dispute with U.S. planemaker Boeing Co over the CSeries.
The U.S. Commerce Department has notched up proposed trade duties on Bombardier's CSeries jets to nearly 300 percent after Boeing complained that the Canadian company received illegal subsidies and dumped the planes at "absurdly low" prices.
Bombardier shares were up 1.7 percent at C$2.37 by late morning while the benchmark Canada share index was up 0.2 percent.
Reporting By Allison Lampert; Editing by Marguerita Choy