Major Share Sale Announcement
Boeing aims to raise $19 billion (€17.56 billion) to strengthen its liquidity. This move comes as the company faces ongoing worker strikes that have lasted over a month.
On Monday, Boeing announced plans to offer 90 million common shares. The sale is expected to generate $14 billion (€12.94 billion). Boeing also intends to raise an additional $5 billion (€4.62 billion) through depositary shares.
The company stated that the funds will support general corporate purposes. These may include debt repayment, capital expenditures, and investments in its subsidiaries. Enhancing liquidity is a key goal for Boeing’s new CEO, Kelly Ortberg, who assumed leadership in August.
Labor Disputes and Financial Strain
The ongoing strike has intensified concerns about Boeing’s financial health. Workers have been striking since September, demanding better pay, pensions, and healthcare benefits. The strike’s estimated cost is around $50 million (€46.22 million) per day.
Last week, Boeing’s contract proposal was rejected by 64% of the voting members of the International Association of Machinists and Aerospace Workers. Union leaders in Seattle confirmed the workers’ overwhelming opposition to the proposal.
This labor dispute compounds an already difficult year for Boeing. Federal authorities are investigating a January incident where a 737 Max door panel detached mid-flight. The strike has further reduced cash flow from aircraft deliveries to airlines.
On Wednesday, Boeing reported a third-quarter loss exceeding $6 billion (€5.55 billion). This was the second-worst quarterly result in the company’s history. Boeing’s financial troubles have continued since 2018, with the company burning nearly $2 billion (€1.85 billion) in cash during the quarter. Boeing’s debt currently stands at $58 billion (€53.61 billion).
Chief Financial Officer Brian West revealed that Boeing does not expect positive cash flow until the latter half of next year. Mounting operational issues, labor disputes, and financial losses have fueled speculation about a potential credit rating downgrade for the company.