On October 28, 2024, Boeing is preparing to launch a plan to raise more than $15 billion in capital, as reported by sources familiar with the matter. This move comes as the company faces significant financial challenges exacerbated by an ongoing strike that has halted production of the 737 MAX.
The capital raise is expected to be achieved through a combination of common shares and mandatory convertible bonds. The total amount raised may increase depending on market demand. Boeing has been under heightened regulatory scrutiny and has experienced a loss of customer confidence following a midair incident involving a 737 MAX.
Last week, machinists at Boeing voted against the company's latest contract offer, which aimed to resolve the ongoing strike. The company previously disclosed a quarterly loss of $6 billion and announced plans to cut 17,000 jobs, representing 10% of its global workforce. Additionally, Boeing has secured a $10 billion credit agreement with major lenders to bolster its financial position.
Credit rating agencies have warned that Boeing's ratings could be downgraded to junk status if the company raises new debt without addressing existing obligations, which include approximately $11 billion maturing by February 1, 2026.