Boeing Seeks to Raise $35B Amid Financial Struggles

Facts

• Aviation giant Boeing notified regulators on Tuesday of plans to raise up to $35B to shore up the company's finances.^[1]
• In a regulatory filing, Boeing said it seeks to raise up to $25B through a stock and debt offering and a $10B credit agreement with major lenders. The company hasn't yet drawn upon the $10B credit facility or its existing credit revolver.^[1][2]
• The plane maker hasn't filed an annual profit since 2018, and has lost more than $25B after two 737 Max jets crashed months apart, killing 346 people.^[3]
• Boeing is facing a litany of challenges, as federal investigators — which have been investigating Boeing's safety culture — have imposed a cap on the production of its MAX jets, and it is yet to negotiate a new contract with its striking union members.^[1][4]
• The work stoppage and production slowdowns are reportedly costing Boeing $1B a month. The company has implemented several cost-cutting measures, including furloughs, and slashed 17K jobs to safeguard its 'long-term future.'^[5][6][7]
• Additionally, Boeing has $11.5B of debt maturing through February 2026 and has committed to issuing $4.7B of its debt to acquire its contractor, Spirit AeroSystems, and assume its debt too.^[5]

Sources: ^[1]Reuters, ^[2]FOX News, ^[3]Associated Press, ^[4]NBC, ^[5]Guardian, ^[6]Seattletimes and ^[7]BBC News.

Narratives

• Narrative A, as provided by Guardian. Job losses, strikes, and the door panel incident have undoubtedly made it a tumultuous year for Boeing. However, these two moves to shore up their finances should be sufficient to put them in the clear for the next three years. In the meantime, they can tend to internal issues and once again turn a profit.
• Narrative B, as provided by Reuters. While these cash-raising measures may be enough to save Boeing's credit rating from slipping anytime soon, that doesn't mean the company is any less likely to buckle under the pressure of this weight. It is facing significant structural issues and, unless it gets its act together quickly, it could soon face bankruptcy.

Predictions