Boeing scrapes together up to $25 billion in money – new stocks and bonds
October 15, 2024, 4:18 p.m. Listen to article
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The US aircraft manufacturer Boeing is in crisis. The strike alone is costing the company a billion dollars a month. The company is now securing new capital from banks. In addition, new shares are to be issued.
The seriously ailing aircraft manufacturer Boeing wants to improve its tense financial situation by selling new shares. In total, at least ten billion dollars should come into the coffers. However, up to $25 billion could be issued in equity or debt over the next three years. As the US group further informed the Securities and Exchange Commission (SEC), a new loan agreement was also concluded with the investors. According to insiders, Boeing is expected to conduct a stock offering that will raise around $10 billion.
Boeing 152,35
Boeing last made money in 2018. A recent strike by Boeing’s largest union worsened the company’s financial problems. Even before the strike, the Seattle company was making losses of around $1 billion every month. At the end of September, the group had $10.3 billion in cash and securities, which is close to the minimum amount the company says it needs to run its operations.
The mountain of debt has now grown to $45 billion. The new $10 billion bank credit agreement is in addition to approximately $10 billion in existing unused revolving credit facilities.
Negotiations stall
“These are two prudent steps to support the company’s access to liquidity,” Boeing said. Boeing shares, which were priced at around $250 at the beginning of the year, were barely changed at around $150 in premarket trading. Ratings agencies have warned that the company needs to raise capital and its debt could be downgraded to junk status.
Boeing had just announced at the end of last week that it would cut around 17,000 jobs and warned of even greater losses. Production of most aircraft, including the best-selling 737, has been halted due to the strike by aircraft mechanics that has now lasted more than a month. In mid-September, 33,000 employees stopped working. Among other things, they are demanding 40 percent more money and the restoration of a defined benefit pension. Boeing recently offered 30 percent and wants to reintroduce a performance bonus and improve pension provision. The negotiations are deadlocked.
In addition to the job cuts, Boeing announced that the introduction of the new 777X, which is already years behind schedule, will be delayed even further. The cargo variant of the 767 is to be discontinued completely.
