Boeing Aims to Soar with $15B Financing Amid Cash Crunch and Strikes

Boeing Co. is reportedly set to embark on a substantial financing initiative as early as Monday, aiming to bolster its liquidity amid ongoing challenges. According to sources, the aerospace giant plans to raise over $15 billion, with the potential to increase based on demand. This capital infusion might include both equity and convertible debt offerings.

This move comes as Boeing strives to maintain its investment-grade rating and rebound from a protracted strike that now spans seven weeks. The company has already consumed nearly $2 billion in cash during the third quarter and anticipates using approximately $4 billion more in the fourth quarter. Boeing projects its annual cash outflow will reach around $14 billion, with further expenditures expected in the first half of next year as it resumes production at its aircraft factories.

Last week, Boeing received authorization from the U.S. Securities and Exchange Commission to issue up to $25 billion in equity and debt, a strategy intended to prevent a downgrade of its credit rating to junk status. A spokesperson for Boeing declined to comment on the ongoing discussions about the exact timing and structure of the financing.

The company's workers recently rejected a new contract proposal, demanding the reinstatement of fixed-benefit pensions, resulting in the continuation of the strike. As part of its contingency plans, Boeing CEO Kelly Ortberg has indicated plans to reduce the workforce by approximately 10%, affecting executives, managers, and employees across the board.

Earlier this month, reports suggested Boeing was exploring the option of issuing new stock to raise at least $10 billion. Investors are paying close attention to Boeing's strategy to navigate its current financial hurdles, especially after the company's share price has plummeted over 40% this year, closing at $155.01 last Friday.

The Arlington, Virginia-based company announced a third-quarter revenue of $17.8 billion, below expectations, as losses in its primary business units widened. Boeing is also assessing its investment portfolio, including considering future options for its troubled Starliner space capsule program, with evaluations set to conclude by the year's end.