Boeing to issue up to $19 billion in stock to shore up finances

Boeing launched a share offering on Monday, October 28, aiming to raise up to $19 billion (€17.57 billion), in order to strengthen its finances, which have been weighed down for more than a month by a strike, and preserve its rating. credit.

The group said it was offering 90 million ordinary shares, with a par value of $5, and $5 billion of depositary shares, representing an interest in convertible preferred shares. Boeing shares fell 2% in pre-market trading on Wall Street.

This operation should allow Boeing to redress its financial situation, which has worsened since some 30,000 American workers walked out on construction sites on the west coast of the United States on September 13, interrupting production of the 737 MAX, the the group’s best-selling aircraft.

Priority debt repayment

The manufacturer was already subject to a production limitation on its MAX jets after a panel exploded in mid-flight in January. The combination of labor and production issues has led Boeing to burn through cash over the past three quarters. Last week, the group reported a loss of $6.17 billion in the third quarter, while its chief executive Kelly Ortberg presented a recovery plan emphasizing the importance of a “fundamental change in culture” of the aircraft manufacturer.

A capital increase is essential for Boeing to maintain its credit rating, as a prolonged strike could cause it to be downgraded. The group said it will use the net proceeds from the offerings for its general purposes, including debt repayment, working capital increase, capital expenditure, financing and strengthening of subsidiaries.

Holders of depositary shares will be entitled to a proportionate fractional interest in the rights and preferences of the preferred shares, Boeing said.