The most important points:
- Machinists reject Boeing‘s latest offer to end the strike
- New funds will come from the sale of shares and convertible preferred shares
- New capital increase aims to maintain the credit rating and increase liquidity
Boeing is expected to unveil its plan for a capital increase of more than $15 billion as early as Monday, a person familiar with the matter told Reuters.
Reuters first reported on October 16 that the aircraft maker (link) was close to a capital increase of around $15 billion in the form of common shares and a mandatory convertible bond to improve financial conditions deteriorated by the ongoing strike (link).
The new capital will come from a mix of sales of shares and convertible preferred shares, the insiders added, saying the total amount could increase depending on demand.
Boeing declined to comment on Sunday.
Bloomberg News already reported on the expected timing of the capital increase on Monday.
Last week, machinists voted nearly two to one against (link) Boeing’s latest offer to end the strike that has halted production of the 737 MAX.
The company said in regulatory filings earlier this month that it could raise up to $25 billion in equity and debt, with its investment-grade rating at risk.
The aerospace giant has struggled with increased regulatory scrutiny, production restrictions and a loss of customer confidence since a 737 MAX door panel was removed in early January (link) stopped in mid-air.
Boeing has been burning through cash all year, reporting a new quarterly loss of $6 billion last week (link). Earlier this month, Boeing said it had secured a $10 billion credit agreement with major lender (link): Bank of America BAC, Citibank 
C, Goldman Sachs 
GS and JPMorgan 
JPM.
Boeing announced earlier this month (link) that it would cut 17,000 jobs – 10 percent of its global workforce – and delay the first deliveries of its 777X jet by a year.
The three leading ratings agencies – S&P, Moody’s and Fitch – have said they will cut Boeing’s rating to junk level if the company takes on new debt, excluding about $11 billion in debt due February 1, 2026 erase.
