Plane maker files papers to raise $25bn through a stock and bond sale, and agrees to new credit facility
15 October 2024 - 14:12
byAbhijith Ganapavaram and Utkarsh Shetti
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Bengaluru — Boeing filed papers with the US markets regulator on Tuesday for raising up to $25bn through a stock and debt offering and entered into a $10bn credit agreement amid a crippling strike and upcoming debt maturities.
The plane maker is looking to strengthen its finances, which have been strained due to a slump in production of its best-selling 737 MAX jet following a door panel blowout and a strike by thousands of union workers. Boeing delivered 33 jets in September, down from 40 in August.
It was not clear when and how much Boeing will raise via the stock offering, but analysts and investors expect the company to raise money before the year-end as debt maturities loom.
Boeing said in a statement it had not drawn on the new $10bn credit facility or its existing credit revolver.
“These are two prudent steps to support the company’s access to liquidity,” Boeing said, adding that the credit agreement provided additional short-term access to liquidity as it navigated through a “challenging environment”.
“This universal shelf registration provides flexibility for the company to seek a variety of capital options as needed to support the company’s balance sheet over a three-year period,” Boeing said, referring to its filing with the US Securities and Exchange Commission.
The company had cash and cash equivalents of $10.89bn as of June 30.
The strike is costing the company more than $1bn a month, according to one estimate that was released before Boeing announced it would cut 17,000 jobs, or 10% of its global workforce. The plane maker was already reeling due to a regulator-imposed cap on production of its MAX jets after a midair cabin-panel blowout in January.
Last month, CFO Brian West said at a Morgan Stanley conference that the company was “constantly evaluating our capital structure and liquidity levels to ensure that we could satisfy our debt maturities over the next 18 months while keeping confidence in our credit rating as investment grade”.
Boeing has $11.5bn of debt maturing in the period to February 1 2026 and has committed to issuing $4.7bn of its shares to acquire Spirit AeroSystems and assume its debt.
Reuters reported earlier this month that Boeing was examining options to raise billions of dollars through a sale of stock and equity-like securities.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Boeing lines up $35bn in funding
Plane maker files papers to raise $25bn through a stock and bond sale, and agrees to new credit facility
Bengaluru — Boeing filed papers with the US markets regulator on Tuesday for raising up to $25bn through a stock and debt offering and entered into a $10bn credit agreement amid a crippling strike and upcoming debt maturities.
The plane maker is looking to strengthen its finances, which have been strained due to a slump in production of its best-selling 737 MAX jet following a door panel blowout and a strike by thousands of union workers. Boeing delivered 33 jets in September, down from 40 in August.
It was not clear when and how much Boeing will raise via the stock offering, but analysts and investors expect the company to raise money before the year-end as debt maturities loom.
Boeing said in a statement it had not drawn on the new $10bn credit facility or its existing credit revolver.
“These are two prudent steps to support the company’s access to liquidity,” Boeing said, adding that the credit agreement provided additional short-term access to liquidity as it navigated through a “challenging environment”.
“This universal shelf registration provides flexibility for the company to seek a variety of capital options as needed to support the company’s balance sheet over a three-year period,” Boeing said, referring to its filing with the US Securities and Exchange Commission.
The company had cash and cash equivalents of $10.89bn as of June 30.
The strike is costing the company more than $1bn a month, according to one estimate that was released before Boeing announced it would cut 17,000 jobs, or 10% of its global workforce. The plane maker was already reeling due to a regulator-imposed cap on production of its MAX jets after a midair cabin-panel blowout in January.
Last month, CFO Brian West said at a Morgan Stanley conference that the company was “constantly evaluating our capital structure and liquidity levels to ensure that we could satisfy our debt maturities over the next 18 months while keeping confidence in our credit rating as investment grade”.
Boeing has $11.5bn of debt maturing in the period to February 1 2026 and has committed to issuing $4.7bn of its shares to acquire Spirit AeroSystems and assume its debt.
Reuters reported earlier this month that Boeing was examining options to raise billions of dollars through a sale of stock and equity-like securities.
Reuters
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