Boeing's crisis is getting worse. Now it's borrowing tens of billions of dollars
Source: CNN
Business / Investing
Boeing’s crisis is getting worse. Now it’s borrowing tens of billions of dollars
By Chris Isidore, CNN
4 minute read
Updated 10:39 AM EDT, Tue October 15, 2024
Boeing 737 Max aircrafts are seen behind fences, Tuesday, Sept. 24, 2024, at the company's facilities in Renton, Wash. Lindsey Wasson/AP
New York (CNN) — Cash-starved Boeing, contending with massive financial losses from a crippling strike and years of operational and safety problems, is turning to major banks and Wall Street to raise tens of billions of dollars in cash.
In a regulatory filing early Tuesday, the company announced plans to borrow $10 billion from a consortium of banks. It also separately announced plans to raise $25 billion by selling stock and debt. The $10 billion borrowing plans would be included in the $25 billion that Boeing filed to raise.
The company’s debt surged in the last six years as Boeing reported core operating losses of more than $33 billion. Its commercial airplane production has ground to a near halt by a month-long strike by 33,000 members of the International Association of Machinists. ... Talks between Boeing and IAM broke down last week with no new negotiations planned. On Friday, Boeing’s new CEO Kelly Ortberg announced plans to cut 10% of its worldwide staff of 171,000 workers.
Boeing’s credit rating has plunged to the lowest investment-grade level – just above “junk bond” status – and major credit rating agencies have warned Boeing is in danger of being downgraded to junk. That would raise its cost of borrowing. Boeing’s long-term debt has climbed to $53 billion at the end of June from $10.7 billion at the end of March 2019, when a second fatal crash of the 737 Max led to a 20-month grounding of that plane, the company’s best-selling aircraft.
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Read more: https://www.cnn.com/2024/10/15/investing/boeing-cash-crisis/index.html
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