Boeing is looking for a cash boost that could rise to $24 billion

A Boeing sign on a facility in Seattle.

Boeing needs cash, and it could raise up to $24.3 billion as it looks to boost its liquidity.

The planemaker announced late Monday that it was offering 112.5 million common shares at a discounted price of $143. Earlier in the day, it had said it was offering 90 million common shares.

Its offering also includes $5 billion worth of depositary shares.

Boeing shares are down 40% since the start of the year, and closed 2.8% lower at $150.69 on Monday.

The offerings’ underwriters also have the option to purchase around 17 million additional common shares and another $750 million in depositary shares.

Assuming these options aren’t exercised, Boeing said its net proceeds would be around $21 billion. If the options were exercised, the total sale could reach $24.3 billion.

Boeing said it intends to use the money for “general corporate purposes” that may include repaying debt, capital expenditures, and investing in its subsidiaries.

Earlier this month, Boeing filed a prospectus saying it may sell up to $25 billion worth of securities, including bonds, new shares, and stock options.

That’s on top of the $10 billion credit agreement it entered into with Bank of America, Citibank, Goldman Sachs, and JPMorgan Chase, described in a regulatory filing on October 14.

In a statement shared with B-17, Boeing previously described the fundraising efforts as “two prudent steps to support the company’s access to liquidity,” adding that it would help the company “navigate through a challenging environment.”

The company faces a troubled financial outlook.

Last Wednesday, Boeing reported a net loss of $6.1 billion in the third quarter. It had recorded a loss of more than $1.4 billion in the previous quarter.

Credit-ratings agencies have said its bonds are at risk of being downgraded to junk status.

Boeing also reported a $250 million increase in spending on its Starliner project in the third quarter. To date, it has spent $1.85 billion on the Starliner program.

2024 has been a challenging year for Boeing.

In January, an Alaska Airlines Boeing 737 Max lost a door plug in midair, sparking regulatory scrutiny and customer frustrations that led Dave Calhoun to resign as CEO.

Boeing is also facing a strike, which started on September 13 after union members rejected a proposal to hike wages by 25% over four years. Last Wednesday, Boeing workers rejected a proposal with a 35% wage increase over four years.

Ron Epstein, a Bank of America analyst, estimated that the strike was costing Boeing $50 million daily.

Also this month, Boeing announced plans to lay off 10% of its workforce and a further delay to its much-anticipated 777X program.

“While many were hopeful that the IAM strike would be settled by now, Boeing needs to maintain its investment grade credit rating and in order to do that, an equity injection is needed,” said Peter McNally, global head of analysts at Third Bridge.