Boeing is poised to initiate a capital raise exceeding USD 15 billion as early as Monday, according to a source familiar with the situation. This move comes as the aerospace giant grapples with financial strains exacerbated by a prolonged strike that has halted production of its 737 MAX aircraft.
The plan involves a combination of common stock sales and mandatory convertible bonds, as previously reported by Reuters. The source indicated that the total amount raised could increase depending on market demand. Boeing has not publicly commented on the specifics of the plan as of Sunday.
Bloomberg News first reported the anticipated timing for the capital raise, which follows a recent vote by machinists who rejected Boeing’s latest offer aimed at resolving the strike. The strike has significantly impacted Boeing’s production capacity and overall financial health.
Earlier this month, Boeing disclosed in regulatory filings that it could potentially raise up to USD 25 billion in stock and debt to shore up its finances, particularly as its investment-grade credit rating faces threats. The company has been under heightened regulatory scrutiny and has experienced production curbs, particularly following an incident in January where a door panel detached from a 737 MAX mid-flight.
Boeing has reported substantial financial losses, including a USD 6 billion loss in the latest quarter. To navigate its financial challenges, Boeing secured a USD 10 billion credit agreement with major banks, including Bank of America, Citibank, Goldman Sachs, and JPMorgan Chase.
In a bid to stabilise operations, Boeing recently announced plans to cut approximately 17,000 jobs, representing 10% of its global workforce, and has delayed the first deliveries of its 777X jet by one year. Credit rating agencies, including S&P, Moody’s, and Fitch, have warned that Boeing risks having its ratings downgraded to junk status if it raises new debt without addressing about USD 11 billion in debt maturing by February 2026.