Boeing is set to raise at least $10 billion by selling new shares as part of a broader effort to stabilize its financial situation.
The move comes as the company faces mounting pressure from a prolonged union strike, ongoing production delays, and years of financial losses. In regulatory filings on Tuesday, Boeing revealed plans to raise up to $25 billion in capital through shares or debt over the next three years, while also securing a new $10 billion credit line with lenders.
The aerospace giant has been struggling with financial difficulties since 2018, the last year it reported a profit. Its financial woes have been compounded by the global grounding of the 737 MAX following two fatal crashes, a slowdown in aircraft deliveries, and a machinists’ strike that began in mid-September, halting production of several key jet models, including the bestselling 737 MAX. The strike is costing Boeing an estimated $1 billion a month in cash burn, further straining its balance sheet.
By the end of September, Boeing had $10.3 billion in cash and securities, a figure near the minimum amount it has said it needs to keep operating. In addition to the stock sale, Boeing’s new credit agreement will add to the company’s existing $10 billion in untapped revolving credit facilities. Boeing currently holds $45 billion in net debt, prompting credit rating agencies to warn that without new capital, the company risks a downgrade to junk bond status.
While Boeing’s stock price has dropped significantly since the start of the year, closing near $150, news of the stock offering and credit line provided a slight boost, with shares rising 2% in afternoon trading on Tuesday.
The strike, which involves roughly 33,000 factory workers on the West Coast, has entered its second month. Workers are demanding a 40% wage increase over four years, while Boeing’s offer of a 30% raise was rejected. As the labor dispute continues, Boeing has delayed the delivery of its 777X jet to 2026, adding to its production challenges.
The company’s financial challenges, alongside the strike, have led to the announcement of 17,000 job cuts and further potential losses. However, credit rating agency Fitch noted that Boeing’s efforts to raise capital should improve its financial flexibility and ease concerns about a potential downgrade.
The Wall Street Journal and Deutsche Welle contributed to this report.
