Boeing will sell $19b in stock as strike weighs on finances
Boeing on Monday began to raise roughly $19b by selling stock, an attempt to shore up its finances as a costly and disruptive worker strike weighs on the plane maker’s balance sheet. The sale comes shortly after the aerospace giant reported a $6.1b loss in the last quarter and said it was cutting about 17,000 jobs. A weekslong strike by Boeing machinists is costing the company tens of millions of dollars each day, according to analyst estimates, adding to the financial strain created by long-running production and quality issues. The fund-raising aims to stave off a potential credit rating downgrade, which could make it more expensive for the company to borrow money. Boeing has about $58b in debt. S&P Global Ratings said this month that it was considering lowering Boeing’s credit rating to “junk” status, depending on how long the strike continues. Boeing’s shares fell about 1% Monday morning. The company’s stock has fallen more than 40% this year. Last week, Boeing’s largest union, which represents about 33,000 workers, rejected a tentative labor contract, extending a strike that began last month and has halted airplane production at crucial plants in the Seattle area. The proposed agreement did not address a frozen pension plan that workers were seeking to restore. Boeing indicated in regulatory filings this month that it planned to raise as much as $25b by selling stock or debt over the next three years, and the company entered into a $10b credit agreement with a group of banks. It described the plans as “two prudent steps to support the company’s access to liquidity.” The plane maker hasn’t reported an annual profit since 2018. Before the machinists’ strike started to weigh on the company, two fatal crashes of Boeing’s 737 Max in 2018 and 2019 cost it billions of dollars and severely damaged its reputation. Concerns about the safety of Boeing’s commercial planes resurfaced in January, when a door panel on a 737 Max 9 jet blew open during an Alaska Airlines flight.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2024-10-29/general/boeing-will-sell-19b-in-stock-as-strike-weighs-on-finances
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Boeing will sell $19b in stock as strike weighs on finances
Boeing on Monday began to raise roughly $19b by selling stock, an attempt to shore up its finances as a costly and disruptive worker strike weighs on the plane maker’s balance sheet. The sale comes shortly after the aerospace giant reported a $6.1b loss in the last quarter and said it was cutting about 17,000 jobs. A weekslong strike by Boeing machinists is costing the company tens of millions of dollars each day, according to analyst estimates, adding to the financial strain created by long-running production and quality issues. The fund-raising aims to stave off a potential credit rating downgrade, which could make it more expensive for the company to borrow money. Boeing has about $58b in debt. S&P Global Ratings said this month that it was considering lowering Boeing’s credit rating to “junk” status, depending on how long the strike continues. Boeing’s shares fell about 1% Monday morning. The company’s stock has fallen more than 40% this year. Last week, Boeing’s largest union, which represents about 33,000 workers, rejected a tentative labor contract, extending a strike that began last month and has halted airplane production at crucial plants in the Seattle area. The proposed agreement did not address a frozen pension plan that workers were seeking to restore. Boeing indicated in regulatory filings this month that it planned to raise as much as $25b by selling stock or debt over the next three years, and the company entered into a $10b credit agreement with a group of banks. It described the plans as “two prudent steps to support the company’s access to liquidity.” The plane maker hasn’t reported an annual profit since 2018. Before the machinists’ strike started to weigh on the company, two fatal crashes of Boeing’s 737 Max in 2018 and 2019 cost it billions of dollars and severely damaged its reputation. Concerns about the safety of Boeing’s commercial planes resurfaced in January, when a door panel on a 737 Max 9 jet blew open during an Alaska Airlines flight.<br/>
