ALBAWABA - Boeing has announced that it intends to raise up to $25 billion through a combination of stock and debt income, in addition to entering into a credit deal with key lenders for $10 billion, according to Reuters, in substantial steps to address its growing financial concerns.
This comes at a time when the aerospace giant is dealing with a production standstill, regulatory setbacks, and a labor strike, all of which are contributing factors to the worst crisis the firm has encountered in its history.
Boeing continues to decline, with $53 billion in long-term debt in June 2023. Operational and safety issues have plagued the airline, including two 737 Max deadly disasters. Regulatory scrutiny and a January 737 Max panel explosion have also slowed manufacturing and complicated Boeing's turnaround.
The company's problems have been made worse by the 33,000 union workers' ongoing strike in the Pacific Northwest. According to Reuters citing analysts, the strike is costing Boeing over $1 billion a month, and as talks are still at a standstill, the company is being forced to reduce its staff by 17,000 positions in addition to looking for new funding.
Major credit rating agencies have warned that Boeing faces the risk of being downgraded to “junk status”, which would increase its borrowing costs, according to CNN. Boeing's credit rating has fallen to the lowest investment-grade level, just a notch above the “junk bond” status.
