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Boeing is looking to scrounge up $25 billion over the next three years by offering at least $10 billion in new stock or bonds, along with issuing new debt, according to reports of the troubled company’s regulatory filings.
It’s Boeing’s second major move in less than a week to prevent a financial nosedive. CEO Kelly Ortberg told employees on Oct. 11 that “over the coming months,” he would cut 10% of their positions—about 17,000 jobs, based on the headcount in its 2023 annual report—to help the company “align with our financial reality and to a more focused set of priorities.”
The company also filed notice of a new $10 billion line of credit on Tuesday.
Strapped for cash. The $10.3 billion in cash and securities that Boeing had on hand at the end of September is “close to the minimum amount the company has said it needs to operate,” the Wall Street Journal reported.
The company hasn’t been building most of its planes since machinists went on strike Sept. 13. If it can’t ramp up production, Boeing won’t be able “to begin generating free cash flow in 2025 and strengthen credit measures,” S&P Global said on Oct. 8, putting the planemaker on notice for a potential downgrade to a junk rating.
The ratings agency also said the strike is “cost[ing] the company more than $1 billion per month, after considering cost-saving measures it implemented in response.” Moody’s also said that if the strike continues and Boeing doesn’t get more cash, they might downgrade its debt. That would increase its annual interest payments by more than $100 million per year, according to Bloomberg.
Emirates Airlines president Tim Clark went further than the ratings agencies. He told industry news source The Air Current that he believed bankruptcy would be “looming on the horizon” if Boeing didn’t get its hands on fresh cash.