boeing said Tuesday it could raise up to $25 billion in equity or debt over three years, a move to boost liquidity as the troubled manufacturer faces a more than month-long machinists' strike and problems across its aircraft programs.
“This universal registration provides the company with flexibility to pursue a variety of capital options as needed to support the company's balance sheet over a three-year period,” Boeing said in a statement.
Boeing shares have fallen nearly 42% this year through Tuesday.
Aerospace analysts at Bank of America have estimated that Boeing will raise between $10 billion and $15 billion in capital.
“We expect Boeing to offer equity first, which should shore up the company's balance sheet in the near term, while maintaining the option to issue equity debt later with lower risk of a credit downgrade,” the analyst wrote Tuesday. by BoFA, Ron Epstein.
Fitch Ratings said Boeing's announcement Tuesday “will increase financial flexibility and moderate near-term liquidity concerns.”
Boeing is trying to shore up its balance sheet as it faces warnings from credit rating agencies that it could lose its investment grade rating.
S&P Global Ratings, one of the agencies that warned of a downgrade, estimated last week that the machinist strike is costing Boeing more than $1 billion a month.
The two sides are at a stalemate. On Tuesday, four U.S. lawmakers representing Washington state wrote to Boeing's new CEO Kelly Ortberg, Jon Holden, chair of IAM District 751, and Brandon Bryant, chair of IAM District W24, urging the parties to reach out. to a solution.
Lawmakers said they looked forward to “quickly resolving a fair and lasting agreement that recognizes the importance of the machinist workforce to the future of Boeing, the Pacific Northwest aerospace economy, and the nation,” in the letter, signed by Washington state . Democrats, Senators Maria Cantwell, Patty Murray and US Representatives Adam Smith and Rick Larsen.
Previously, Boeing said separately in a filing that it has an agreement with a consortium of banks for a $10 billion credit deal.
“The credit facility provides additional access to near-term liquidity as we navigate a challenging environment,” the company said in a statement. “The company has not drawn on this line of credit or its current revolving credit.”
On Friday, Ortberg warned that the company plans to lay off about 17,000 employees, or 10% of its global workforce, to cut costs.
“We need to be clear about the work we face and be realistic about the time it will take to reach key milestones on the road to recovery,” he said, adding that Boeing needs to focus resources on “areas that are fundamental to who we are.”
The announcement came alongside preliminary financial results, which show mounting losses and $5 billion in charges at Boeing's commercial and defense aircraft units.
On Oct. 23, Ortberg will hold his first quarterly investor call since becoming Boeing CEO in August.
