On October 28th, according to sources, Boeing plans to launch a new round of financing as early as this Monday (October 28th). This move will help the troubled aircraft manufacturer improve liquidity.

According to an insider, the company will raise more than $15 billion from this financing and supplement the fact that this amount may still increase according to demand. Previously, Boeing's advisors have been looking for potential investors for this capital raise, which may include both stocks and convertible debt forms.

If Boeing issues $15 billion in new stocks, it will be the largest stock offering since SoftBank Group sold part of its stake in T-Mobile USA in 2020.

Boeing's stock price has fallen by nearly 40% so far this year. It closed at $155.01 per share last Friday (October 25).

Maintain rating

Boeing is in urgent need of financing. One is to maintain its investment-grade rating, and the other is to provide funding for the company's recovery from a severe strike, which has now entered its seventh week.

During last week's earnings conference, Boeing disclosed lower-than-expected revenue and higher-than-expected losses, stating that it had burned nearly $2 billion in cash in the third quarter and is expected to use about $4 billion in cash in the fourth quarter, bringing its full-year free cash flow outflow to approximately $14 billion. The aircraft manufacturer expects to continue 'burning cash' in the first half of next year as it restarts aircraft factories.

Regarding the financial problems facing the company, Boeing's Executive Vice President and Chief Financial Officer Brian West emphasized during the earnings conference that maintaining the investment-grade rating is the company's top priority.

Last Wednesday (October 23), Boeing received approval from the Securities and Exchange Commission (SEC) to sell up to $25 billion in equity and bonds, a move that may help Boeing avoid a downgrade to junk status.

Furthermore, Boeing is currently mired in strike troubles. Last week, workers at Boeing factories voted to reject the company's latest contract proposal as it did not include the restoration of fixed benefit retirement plans, indicating that the strike is ongoing.

Earlier this month, there were reports that Boeing is considering raising at least $10 billion through the sale of new shares and is exploring various options with advisors as the company seeks to replenish cash reserves further depleted due to ongoing strikes.

Boeing CEO Kelly Ortberg pointed out in mid-month that if the strike continues, the company plans to lay off about 10%, including executives, managers, and employees.

Insiders have recently stated that related financing discussions are still ongoing, and specific details such as timing may still change.

Bank of America analyst Ronald Epstein previously issued a report stating that Boeing is expected to first issue stocks, which will provide short-term support to the company's balance sheet while retaining the option for future debt financing, thereby reducing the risk of a credit rating downgrade. Epstein estimated last week that Boeing would raise $18 billion to $20 billion.