Investing.com — Boeing Co (NYSE:) plans to launch a $15 billion capital raise as early as Monday, media reports, as the planemaker grapples with a grueling strike and falling cash levels.
Reports of a possible fundraiser have increased in recent weeks as the work stoppage involving about 33,000 employees has left the group losing money for more than a month.
Boeing has reportedly received approval from the Securities and Exchange Commission to raise up to $25 billion. The aerospace giant is also trying to avoid a possible downgrade of its credit rating to junk.
Last week, workers rejected a revised contract offer from Boeing, further putting pressure on new CEO Kelly Ortberg’s plans to overhaul its operations.
Of the International Association of Machinists and Aerospace Workers District 751 members who voted, 64% said no to the new offer, which would have increased their wages by 35% over the next four years and provided a larger retirement benefit. Following the decision, union leaders – who have called for a 40% pay increase and the return of defined benefit pensions – said they were ready to return to the bargaining table with Boeing.
Meanwhile, Ortberg called for a “fundamental culture change” at Boeing, which also recently faced scrutiny over its safety performance after a dangerous blow to the air door of one of its planes earlier this year. Ortberg added that the company is at a “crossroads” after posting a net loss of $6.17 billion in the third quarter, compared to a loss of $1.64 billion in the corresponding period in 2023.
Ortberg noted that “serious performance issues” had eroded customer confidence and contributed to the mounting debt mountain.
At the same time, Chief Financial Officer Brian West warned analysts that the company would continue to drain cash in the last three months of 2024 and into 2025.
Shares of Boeing, which have fallen more than 38% so far this year, were slightly lower in premarket trading in the US on Monday.
(Ambar Warrick contributed reporting.)
