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Boeing (BA.US) is close to a financing deal to help Spirit Aerosystems (SPR.US), according to reports.

AInvestFriday, Nov 8, 2024 10:10 pm ET
1min read

Boeing (BA.US) is close to a financing deal with Spirit Aerosystems (SPR.US) to provide support to the troubled supplier, according to people familiar with the matter. The transaction could be announced in the coming days, the people said.

Spirit Aerosystems is facing financial and production challenges. The company issued a liquidity warning on Tuesday after four consecutive years of losses. The company expects to burn through $450 million to $500 million in cash in the last three months of 2024 and the first half of 2025, according to a filing. As of the end of the third quarter, the company had $218 million in cash.

Spirit Aerosystems said this week it was seeking ways to boost liquidity, including possible customer prepayments. The company previously disclosed it had drawn down a $350 million bridge loan set up when Boeing agreed to buy the company, as well as prepayments from Boeing and Airbus.

Another person familiar with the matter said Spirit Aerosystems has been considering furloughing employees on the 737 MAX fuselage program due to storage and cash shortages. The company last month decided to temporarily lay off 700 employees who make parts for Boeing 767 and 777 jetliners, according to a report.

Spirit AeroSystems is an aerospace structure supplier for Boeing's 737 Max and 787 Dreamliner, as well as parts for Airbus aircraft. About a quarter of its revenue comes from Airbus projects. A person in the industry said cash support from Airbus was also an option, as the European company had warned that deliveries of its A350 could be disrupted next year due to concerns about whether Spirit Aerosystems could deliver fuselage parts on time.

Boeing is buying Spirit AeroSystems, and the deal is expected to be completed next year. Boeing CEO Kelly Ortberg reiterated the company's commitment to buy Spirit AeroSystems in a stock-for-stock deal in 2025 in a recent call with analysts.

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