Boeing in $35bn cash call amid strikes crisis

Boeing has filed a registration statement with the US markets regulator that will allow the struggling planemaker to raise up to $25 billion as it faces a continuing strike, production delays and upcoming debt maturities.
It was not clear when or how much Boeing will raise via the offering, which is through various debt securities and share classes, but analysts and investors expect the company to raise money before the end of the year.
Earlier on Tuesday, the company entered a separate credit agreement worth $10 billion with a consortium of banks. The company had cash, or cash equivalents, of $10.89 billion as of June 30. Boeing said it provided “additional short-term access to liquidity as we navigate through a challenging environment”.
Boeing’s cash woes have worsened since roughly 33,000 of its workers represented by the Machinists union walked off their jobs in September, halting production of its bestselling 737 MAX aircraft.
The strike is costing the company around $1 billion a month, according to one estimate released before Boeing announced it would cut 17,000 jobs or 10 per cent of its global workforce.
The company was already reeling due to a regulator-imposed cap on production of its Max jets after a cabin panel blew out mid-flight in January.
Boeing has posted operating cash flow losses of more than $7 billion for the first half of 2024 and had about $60 billion in debt, including the $10 billion it raised earlier this year.
The developments come at a time when Boeing is looking to preserve its investment-grade credit rating amid the looming threat of a first-ever downgrade into junk territory.
Last month Brian West, Boeing’s chief financial officer, 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 $11.5 billion of debt maturing through February 1, 2026, and has committed to issuing $4.7 billion 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.
Boeing delivered 33 jets in September, down from 40 in August.