boeing The company announced Tuesday that it may raise up to $25 billion in equity or debt over three years. The move is a move to boost liquidity as the struggling manufacturer faces more than a month of machinists’ strikes and problems across its aircraft program.
“This universal shelf registration provides the company with the flexibility to explore various capital options as needed to support its three-year balance sheet,” Boeing said in a statement.
Boeing stock has fallen nearly 42% since the beginning of the year as of Tuesday.
Bank of America aerospace analysts estimate that Boeing will raise between $10 billion and $15 billion in equity.
BoFA analyst Ron Epstein said Tuesday: “We expect Boeing to offer equity first, which will strengthen the company’s balance sheet in the near term while reducing the risk of a credit downgrade.” The option to issue equity bonds at a later date will also be maintained.”
Fitch Ratings said Boeing’s announcement on Tuesday “enhances its financial flexibility and eases short-term liquidity concerns.”
Boeing is working to strengthen its balance sheet as it faces warnings from credit rating agencies that it could lose its investment-grade rating.
S&P Global Ratings, one of the agencies that warned of a downgrade, estimated last week that the mechanics’ strike was costing Boeing more than $1 billion a month.
The two sides are in a stalemate. On Tuesday, four U.S. lawmakers representing Washington state sent a letter to Boeing’s new CEO Kelly Ortberg, IAM District 751 President John Holden, and IAM District W24 President Brandon Bryant, urging the parties to find a resolution. I asked.
In a letter signed by the state of Washington, the lawmakers called for “quickly a fair and lasting agreement that recognizes the importance of the machinist workforce to Boeing’s future, the Pacific Northwest’s aerospace economy, and the nation. He said he hopes to “bring it together.” Democratic Sen. Maria Cantwell, Sen. Patty Murray, Rep. Adam Smith, and Rep. Rick Larsen.
Earlier, Boeing said in a separate filing that it had entered into a $10 billion credit agreement with a consortium of banks.
“The credit facility provides additional short-term liquidity access as we navigate a challenging environment,” the company said in a statement. “The company does not utilize this facility or its existing credit revolver.”
Ortberg warned on Friday that the company plans to lay off about 17,000 employees, or 10% of its global workforce, to cut costs.
“We need to take a sober view of the task before us and be realistic about the time it will take to achieve key milestones in our recovery,” he said, adding that Boeing has “finished business at its core.” He added that there is a need to focus resources on areas where we. “
The announcement coincided with preliminary financial results, which revealed mounting losses and $5 billion in costs at Boeing’s defense and commercial aircraft divisions.
On October 23, Ortberg will hold his first quarterly investor conference call since becoming Boeing’s CEO in August.
