(Bloomberg) — Boeing Co. (BA) is considering raising at least $10 billion by selling new stock, as the planemaker seeks to replenish cash reserves depleted further by an ongoing strike, according to people familiar with the discussions.
Most Read from Bloomberg
The company is working with advisers to explore its options, said the people, asking not to be identified discussing confidential matters. Raising equity isn’t likely to happen for at least a month, assuming the planemaker can resolve the strike, because Boeing wants a firm grasp of the financial toll from the walkout by 33,000 workers, the people said.
Boeing factory workers gather on a picket line during the first day of a strike on September 13, 2024. REUTERS/Matt Mills McKnight (Reuters / Reuters)
A spokesman for Boeing declined to comment. No final decision on timing and the amount has been made, and Boeing could end up deciding against the move, the people said.
Boeing is under pressure to shore up its finances and hold onto its investment-grade credit rating. The company is one step away from dropping into speculative territory, which would further drive up the cost to service its $58 billion debt load. The situation has been exacerbated by the strike now in its third week that has shut down output of Boeing’s single-aisle airliner, as each day of stoppage further dents reserves.
The US planemaker has seen its financial reserves dwindle in the wake of a near-catastrophic accident in January that forced Boeing to slow production of its cash-cow 737 Max airliner. Should Boeing proceed, a sale of that magnitude would stand to be the biggest by a public company since Saudi Arabian Oil Co.’s $12.3 billion sale in June.
The stock fell as much as 3.6% in pre-market trading as investors weighed the dilutive effect of a potential share sale. The planemaker has lost 42% in value this year, putting it on course for its worst annual return since the financial crisis in 2008. That leaves Boeing with a market value of about $93.6 billion.
Suspended talks
Boeing faces a liquidity squeeze after burning through…
..
