Boeing on Tuesday submitted documents to the capital markets regulator in the United States to raise up to US$25 billion through a share and debt offering and signed a US$10 billion credit agreement amid a strike. which has paralyzed the company and debts that are approaching maturity.
The planemaker is looking to shore up its finances, which have been strained due to a drop in production of its 737 MAX jet, following an incident with a piece of the plane’s fuselage earlier this year and an ongoing strike by thousands of workers since September 13th.
It was unclear when and how much Boeing will raise through the stock offering, but analysts estimate the company needs to raise between $10 billion and $15 billion to maintain its credit ratings.
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“These are two prudent measures to support the company’s access to liquidity,” Boeing said, adding that the credit agreement provides additional near-term access to liquidity as it navigates a “challenging environment.”
“This registration provides flexibility for the company to pursue 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 SEC. which regulates the capital markets in the USA.
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The company will use the funds for general corporate purposes, according to the document. The planemaker had $10.89 billion in cash and cash equivalents as of June 30.
The strike is costing Boeing more than $1 billion a month, according to an estimate released before the company announced it would cut 17,000 jobs, or 10% of its global workforce.
The planemaker was already facing problems due to a limit imposed by regulators on the production of its MAX aircraft following the January incident involving one of its jets.
(By Abhijith Ganapavaram and Utkarsh Shetty in Bengaluru)
