Boeing is gearing up to raise more than US$15bn this week in a bid to stabilise its finances. This move is part of a larger effort to address the company’s ongoing liquidity crisis. According to sources, the fundraising is expected to involve a mix of stock sales and convertible debt. Depending on investor interest, the final amount raised could exceed US$15bn.
The US Securities and Exchange Commission (SEC) recently granted Boeing the green light to raise up to US$25bn in equity and debt. This capital is crucial for the company to avoid a downgrade of its credit rating to junk status. Boeing is facing significant cash flow challenges, exacerbated by a prolonged strike among factory workers and production issues linked to safety concerns.
Last week, Boeing’s workforce rejected a proposed contract, leading to a continuation of the strike, now in its seventh week. Meanwhile, the company has forecasted a cash burn of around US$4bn in the fourth quarter, bringing its expected cash outflow for the year to US$14bn. This financial strain follows a reported US$6bn loss in the third quarter, heightening pressure to secure additional funds.
In addition to this capital raise, Boeing has secured a $10bn credit line with major banks, offering a short-term financial cushion. The company’s liquidity efforts aim to maintain its investment-grade credit rating while it navigates these turbulent times.
