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Boeing’s $15bn Capital Raise Could Launch Today; Exploring Sale of Its Space Biz – WSJ
October 28, 2024
Boeing is planning to launch a $15bn capital raise as early as Monday, to enhance its liquidity, according to sources. The offering, which could include both shares and convertible debt, follows the company’s recent clearance from the US Securities and Exchange Commission (SEC) to sell up to $25bn in equity and debt. This move is intended to help Boeing to maintain its investment-grade rating and support its recovery from an ongoing seven-week strike. Ongoing discussions may alter the details and timing of the offering, the sources added. As reported last week, the company expects to burn ~$4bn in cash during 4Q, totaling about $14bn for the year with the cash outflows continuing into the first half of next year as well. Recently, its factory workers rejected a contract offer with a 35% wage increase over four years. Earlier Boeing had reported that it had not yet drawn on its $10bn credit facility agreement.
In related news, Boeing is considering a sale of its space business, which includes the troubled Starliner space vehicle and operations that support the International Space Station, but excludes the unit building NASA’s Space Launch System, according to WSJ. The Starliner spacecraft has been hindered for years by development delays and technical problems, with more than $1.8bn in private cost overruns.
Boeing’s bonds traded broadly stable with its 3.5% 2045s at 66.4. yielding 6.5%.
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