Boeing Seeks to Raise $25 Billion in Shares or Debt Over Three Years
Boeing, the troubled aircraft manufacturer, announced on Tuesday its plans to raise as much as $25 billion in shares or debt over the next three years. This move comes as Boeing faces a more than monthlong machinist strike and challenges throughout its aircraft programs.
According to Boeing, this universal shelf registration provides the company with flexibility to seek various capital options as needed to support its balance sheet. In addition to this, Boeing has secured a $10 billion credit agreement with a consortium of banks to provide short-term access to liquidity during this challenging period.
The aircraft manufacturer’s shares have dropped nearly 43% this year, prompting credit ratings agencies like S&P Global Ratings to warn about a potential downgrade of Boeing’s investment-grade rating. These agencies estimate that the ongoing machinist strike is costing Boeing over $1 billion per month, further adding pressure on the company.
In response to the financial challenges, Boeing’s new CEO, Kelly Ortberg, announced plans to lay off about 17,000 employees, approximately 10% of its global workforce, in an effort to cut costs. Ortberg emphasized the need for the company to focus its resources on core areas to facilitate recovery.
The latest financial results from Boeing reveal mounting losses and $5 billion in charges within its defense and commercial airplane units. Ortberg is set to host his first quarterly investor call as Boeing’s CEO on October 23, providing insights into the company’s strategic direction and recovery plans.
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