Boeing moves to preserve cash and draws down $13.8b loan
Boeing lost close to a fifth of its market value on Wednesday as the aircraft manufacturer took measures to preserve cash in the face of a coronavirus pandemic that has caused turmoil in the aviation industry and threatens to further weaken its balance sheet. The company, already dealing with the costs of the grounding of its 737 Max aircraft, has tapped the full amount of a $13.8b loan arranged barely a month ago, according to people familiar with the arrangement. Boeing also instituted a hiring freeze and limited overtime for all employees except for those working to return the Max to service and on “other key efforts” to support customers, according to a memo from Boeing’s top two executives. It also restricted travel and discretionary spending to activities critical to the business. The plane maker’s stock fell 18% to below $200 for the first time since July 2017 and has now more than halved since the day in March 2019 when the Max suffered its second deadly crash, triggering a worldwide ban on its use. “The year ahead is shaping up to be as challenging for our business as any in the recent past,” David Calhoun, CE, and Greg Smith, CFO, wrote in a message to employees. “On top of the work of safely returning the 737 Max to service and the financial impact of the pause in Max production, we’re now facing a global economic disruption generated by the Covid-19 coronavirus.”<br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-03-12/general/boeing-moves-to-preserve-cash-and-draws-down-13-8b-loan
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Boeing moves to preserve cash and draws down $13.8b loan
Boeing lost close to a fifth of its market value on Wednesday as the aircraft manufacturer took measures to preserve cash in the face of a coronavirus pandemic that has caused turmoil in the aviation industry and threatens to further weaken its balance sheet. The company, already dealing with the costs of the grounding of its 737 Max aircraft, has tapped the full amount of a $13.8b loan arranged barely a month ago, according to people familiar with the arrangement. Boeing also instituted a hiring freeze and limited overtime for all employees except for those working to return the Max to service and on “other key efforts” to support customers, according to a memo from Boeing’s top two executives. It also restricted travel and discretionary spending to activities critical to the business. The plane maker’s stock fell 18% to below $200 for the first time since July 2017 and has now more than halved since the day in March 2019 when the Max suffered its second deadly crash, triggering a worldwide ban on its use. “The year ahead is shaping up to be as challenging for our business as any in the recent past,” David Calhoun, CE, and Greg Smith, CFO, wrote in a message to employees. “On top of the work of safely returning the 737 Max to service and the financial impact of the pause in Max production, we’re now facing a global economic disruption generated by the Covid-19 coronavirus.”<br/>
