Boeing The U.S. airline said on Tuesday it could raise up to $25 billion in equity or debt over three years, a move to increase cash as the struggling manufacturer faces a mechanical strike lasting more than a month and problems across its aircraft programs.
“This global shelf registration provides the company flexibility to seek a variety of capital options as needed to support the company’s balance sheet over a three-year period,” Boeing said in a statement.
Boeing shares were down nearly 42% this year as of Tuesday.
Aviation analysts at Bank of America estimate that Boeing will raise between $10 billion and $15 billion in equity.
“We expect Boeing to offer equity first, which would support the company's balance sheet in the near term while maintaining the option of issuing equity debt later with less risk of a credit rating downgrade,” BoE analyst Ron Epstein wrote on Tuesday.
Fitch Ratings said Tuesday's announcement from Boeing “will increase financial flexibility and mitigate near-term liquidity concerns.”
Boeing is trying to shore up its balance sheet as it faces warnings from credit rating agencies that it may lose its investment grade rating.
S&P Global Ratings, one of the agencies that warned of the downgrade, estimated last week that the mechanics' strike is costing Boeing more than $1 billion a month. The two sides have reached an impasse.
Earlier, Boeing separately said in a filing that it had an agreement with a consortium of banks for a $10 billion credit agreement.
“The credit facility provides additional short-term access to liquidity as we navigate through a challenging environment,” the company said in a statement. “The company has not drawn down on this facility or its existing credit revolver.”
Boeing's new CEO, Kelly 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 be clear about the work we have ahead of us, and realistic about the time it will take to achieve key milestones on the road to recovery,” he said, adding that Boeing needs to focus resources on “the core areas of those who matter most.” we.”
The announcement came alongside preliminary financial results, which showed rising losses and $5 billion in charges at Boeing's defense and commercial aircraft units.
On October 23, Ortberg will hold his first quarterly investor call since becoming Boeing CEO in August.
