Boeing considers raising at least $10 billion in share sale, Bloomberg News reports

11:46 am Tuesday, October 01st, 2024

(Reuters) -Boeing is considering raising at least $10 billion by selling new stock, Bloomberg News reported on Tuesday, citing people familiar with the discussions.

The planemaker is working with advisers to explore its options, the report said, adding that raising equity is not likely to happen for at least a month.

Boeing declined to comment on the Bloomberg report.

Last month, CFO Brian West did not directly answer when asked if Boeing may need to raise debt or equity by the year-end or early 2025.

“First of all, we want to prioritize the investment grade credit rating. And secondly, we want to allow the factory and the supply chain to stabilize. That last objective just got harder based on last night,” he had said, referring to the ongoing strike by over 30,000 workers.

The planemaker has been under pressure from slumping production of its strongest-selling 737 MAX jet, after a January incident when a door panel blew off a new model mid-air.

Its finances were further strained after thousands of workers represented by the International Association of Machinists and Aerospace Workers in the Seattle and Portland areas walked off the job in September.

Boeing is carrying a heavy debt load of about $60 billion and posted operating cash flow losses of more than $7 billion for the first half of 2024, according to data compiled by LSEG.

The U.S. planemaker had previously signaled it would consider issuing equity as it deals with ongoing safety problems exposed by the January blowout and looming debt maturities.

Industry experts had said Boeing would likely need to raise cash by the end of 2024, with some analysts and investors expecting the company to raise between $10 billion and $12 billion.

Boeing has just under $4.6 billion in bonds and loans coming due by end of 2025, according to data compiled by LSEG.

Shares of the planemaker rose about 1% in morning trading.

(Reporting by Utkarsh Shetti in Bengaluru; Editing by Shilpi Majumdar)