Boeing shores up finances even as striking workers rally

In a move to shore up its sagging finances, Boeing has announced plans to raise up to $25bn through stock and debt offerings and a $10bn credit agreement with major lenders amid a production and regulatory crisis.

Boeing announced its plans on Tuesday.

It was not clear when and how much the plane maker would eventually raise via the offering, but analysts estimate that Boeing would need to raise somewhere between $10bn and $15bn to be able to maintain its credit ratings, which are now just one notch above junk.

The company is grappling with a slump in production of its best-selling 737 MAX jet following a mid-air door panel blowout earlier this year and a strike by thousands of United States union workers since September 13.

Boeing said on Tuesday it had not drawn on the new $10bn credit facility arranged by BofA, Citibank, Goldman Sachs and JPMorgan, or its existing revolving credit facility.

“These are two prudent steps to support the company’s access to liquidity,” Boeing said, adding that the potential stock and debt offerings would provide options to support its balance sheet over a three-year period.

The company’s shares were up by 1.6 percent on Tuesday.

S&P Global and Fitch had warned of a downgrade last month. The ratings agencies said on Tuesday that the stock and debt offerings could help preserve Boeing’s investment-grade rating.

“The supplemental credit facility also seems like a sensible precaution,” S&P Global’s Ben Tsocanos said.