BOEING (BA.N), opens new tab filed papers with the U.S. markets regulator on Tuesday for raising up to $25 billion through a stock and debt offering and entered into a $10 billion credit agreement amid a crippling strike and upcoming debt maturities.
The planemaker is looking to strengthen its finances that have been strained due to a slump in production of its best-selling 737 MAX jet following a door panel blowout and a strike by thousands of union workers.
It was not clear when and how much Boeing will raise via the stock offering, but analysts and investors expect the company to raise money before the year-end as debt maturities loom.
Shares of the planemaker reversed course to trade down 0.3% in premarket trading.
Boeing said in a statement it had not drawn on the new $10 billion credit facility or its existing credit revolver.
“These are two prudent steps to support the company’s access to liquidity,“ Boeing said, adding that the credit agreement provides additional short term access to liquidity as it navigates through a “challenging environment.”
“This universal shelf registration provides flexibility for the company to seek a variety of capital options as needed to support the company’s balance sheet over a three year period,“ Boeing said, referring to its filing with the U.S. Securities and Exchange Commission.
The company had cash and cash equivalents of $10.89 billion as of June 30.
STRIKE COSTS
The strike is costing the company more than, opens new tab $1 billion per month, according to one estimate that was released before Boeing announced it will cut 17,000 jobs or 10% of its global workforce.
The planemaker was already reeling due to a regulator-imposed cap on production of its MAX jets after a mid-air cabin-panel blowout in January.
Last month, Chief Financial Officer Brian West said at a Morgan Stanley conference that the company was “constantly evaluating our capital structure and liquidity levels to ensure that we could satisfy our debt maturities over the next 18 months while keeping confidence in our credit rating as investment grade.”
Boeing has $11.5 billion of debt maturing through Feb. 1, 2026, and has committed to issuing $4.7 billion of its shares to acquire Spirit AeroSystems and assume its debt.
Reuters reported earlier this month Boeing was examining options to raise billions of dollars through a sale of stock and equity-like securities.
Boeing delivered 33 jets in September, down from 40 in August.
