The Boeing Co. logo is displayed on top of company offices near Los Angeles International Airport (LAX) in El Segundo, California on January 18, 2024. Photo by Patrick T. Fallon / AFP
New York: US aircraft maker Boeing said Tuesday it will raise more money than initially expected from a new stock offering to offset crushing production woes and a major strike.
The company is now expected to raise at least $21 billion, it said a day after announcing a stock offering valued at up to $19 billion.
The proceeds will go towards repaying debt and investing in its subsidiaries.
The aviation giant's move comes after it reported a whopping $6.2 billion quarterly loss last week in the wake of a paralyzing labor strike.
Boeing said on Monday it was offering 90 million shares of common stock -- valued at around $13.9 billion at current market prices -- in addition to $5 billion in depositary shares.
On Tuesday, it announced the sale of 112.5 million additional shares, bringing the overall value of the offering to "approximately" $21 billion.
If oversubscribed, Boeing could potentially sell additional securities worth as much as $3 billion.
Boeing faces a continued cash crunch until the strike by 33,000 workers, which has shuttered major assembly plants in the Seattle region since mid-September, is resolved and it manages to ramp production back up.
Even before the strike, Boeing had been forced to limit output of the 737 MAX under a federal order after an incident in January in which an Alaska Airlines jet made an emergency landing after suffering the blowout of a fuselage panel.
In its Monday filing, Boeing said it "intends to use the net proceeds from the offerings for general corporate purposes".
The offering comes as Boeing faces myriad problems following safety lapses on commercial planes, problem-filled space projects and cost-overruns on defense contracts. The company is on track for its sixth straight annual loss.
The "cash to be raised likely keeps them investment grade through the end of 2025 based on what we know today," Third Bridge analyst Peter McNally said Monday.
But he warned that the situation at Boeing "remains complex" even with a rapid end to the strike, deliveries are unlikely to contribute to cash flow until the second half of 2025.
