Troubled Boeing signals it may raise up to $25 billion to shore up finances
SEATTLE — Boeing announced Tuesday that it could raise up to $25 billion in new equity or debt to strengthen its balance sheet after years of crisis. heavy losses.
The company said in successive regulatory filings that it could raise the money in the next three years. The country also signed a new loan agreement with lenders to provide short-term protection against a cash crunch. It also signed a new $10 billion credit agreement with lenders to provide short-term protection against a cash crunch.
Boeing has not made an annual profit since 2018 and has since lost more than $25 billion after two 737 Max jets crashed, killing 346 people. Finances are under new pressure as a strike by workers which is building most of its aircraft factory, is entering its second month. The strike raises money, which Boeing receives when it delivers new planes to buyers.
The strike is also getting the attention of the Biden administration. Julie Su, the acting labor secretary, visited Seattle on Monday and met with the union and Boeing, according to the International Association of Machinists and Aerospace Workers.
Boeing workers packed a union hall Tuesday for a raucous rally intended to show solidarity among the strikers.
“We could talk about solidarity, but when you see it, it certainly makes you happy,” says Sergio Lombardo, who worked at Boeing for fourteen years.
Jeff Cook, a quality inspector with 28 years of experience at Boeing, said the meeting sends a message to Boeing corporate officials “that we’re not just going to lie down. We’ve been lying to them for 16 years, and it’s just not going to work.” to fly no more.”
Boeing has burned through more than $1 billion in cash and ended September with $10.3 billion in cash and securities.
On Friday, new CEO Kelly Ortberg said Boeing will do so cut about 10% of its workforce – about 17,000 jobs – and has postponed the launch of a new model of the large 777 aircraft.
Production of current models of the 777 and Boeing’s best-selling aircraft, the 737 Max, have been halted due to the strike.
Boeing’s securities filings on Tuesday are called shelf filings, which indicate a company has the ability to raise money without committing to anything.
The company also reported that to provide short-term liquidity, it has entered into a new additional credit agreement with units of Bank of America, Citibank, Goldman Sachs and JPMorgan Chase.
Fitch Ratings said the announcements increase Boeing’s financial flexibility and alleviate near-term liquidity concerns. Management’s ability to tap sources of capital other than debt “will help alleviate downgrade risks” by improving the prospects for servicing debt maturing in 2025 and 2026, Fitch said.
Standard & Poor’s said last week it is considering downgrading Boeing’s credit rating.
Shares of Arlington, Virginia-based The Boeing Co rose 2% on Tuesday.
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Koenig reported from Dallas.