Boeing is reportedly set to launch an effort to raise over $15 billion in capital as early as Monday, according to a source familiar with the plan.
The funding, expected to come through a mix of stock sales and convertible preferred shares, aims to bolster Boeing’s liquidity and maintain its investment-grade credit rating, which faces potential downgrades from major agencies if Boeing accrues more debt without addressing some of its outstanding obligations.
The capital raise comes as Boeing navigates complex financial challenges, including a strike by machinists who recently voted by a nearly two-to-one margin to reject the company’s latest contract proposal. This labor action has disrupted the production of Boeing’s 737 MAX, adding to the company’s operational and financial pressures.
In recent regulatory filings, Boeing indicated it could raise up to $25 billion in capital, as it works to strengthen its balance sheet amid rising costs and regulatory issues. Earlier this month, the aerospace manufacturer announced a $6 billion quarterly loss and outlined a plan to cut approximately 17,000 jobs, or 10% of its global workforce. Boeing also noted it would delay deliveries of its highly anticipated 777X jet by a year, a move that aligns with its broader strategy to manage production curbs.
The company has been relying on cash infusions, including a $10 billion credit line secured with major financial institutions such as Bank of America, Citibank, Goldman Sachs, and JPMorgan. Additionally, Boeing’s efforts to protect its credit rating reflect heightened scrutiny from rating agencies like S&P, Moody’s, and Fitch, which have signaled a potential downgrade to “junk” status if the company continues to take on debt without retiring approximately $11 billion set to mature over the next few years.
With input from Reuters.
