Boeing, In Need Of Cash, Looking To Raise Up To Approximately $19B In Offering

Boeing plans to raise $19 billion in stock offering as the aerospace giant deals with a controversial strike, confronts liquidity concerns, and seeks to raise funds.

Boeing Co. announced Monday that it will issue 90 million ordinary stock and $5 billion in depositary shares. The company’s stock finished at $155.01 on Friday.

The business stated that the net proceeds will be used for general corporate purposes, such as debt repayment, working capital expansion, capital expenditures, and finance and investments in its subsidiaries.

Boeing, In Need Of Cash, Looking To Raise Up To Approximately $19B In Offering

Fitch Ratings said on Monday that the sale promotes debt repayment and increases financial flexibility, lowering the likelihood of a downgrade. The agency continued to assess Boeing’s capacity to resolve labor disputes and regain operational momentum. It gives Boeing a “BBB-,” the lowest investment-grade rating.

Last week, Boeing plant workers rejected the company’s latest contract offer and extended a six-week strike that halted production of its best-selling jetliners.

According to local union leaders in Seattle, 64% of members of the International Association of Machinists and Aerospace Workers voted opposed to accepting the proposal.

The labor impasse comes amid an already difficult year for Boeing, which was the subject of various federal probes when a door panel blew off a 737 Max plane during an Alaska Airlines flight in January.

Boeing, In Need Of Cash, Looking To Raise Up To Approximately $19B In Offering

The walkout has deprived the corporation of much-needed revenue from delivering new planes to airlines. On Wednesday, the business announced a third-quarter loss of more than $6 billion. Boeing has not had a profitable year since 2018, and Wednesday’s results were the second-worst quarter in the company’s history.

The corporation burnt roughly $2 billion in cash in the quarter, weakening its balance sheet, burdened with $58 billion in debt. Chief Financial Officer Brian West stated that the company will not achieve positive cash flow until the second part of next year.

Boeing shares fell marginally in noon trade. They’ve lost 40% of their worth so far this year.

SOURCE | AP