Boeing secures $10 billion in new loan and plans to raise another $25 billion | News

Boeing is taking steps to secure billions of dollars in additional funding as the company works to strengthen its battered balance sheet in the face of a costly machinists' strike.

The U.S. plane maker has reached an agreement with lenders to secure up to $10 billion in additional loans, the company said in an Oct. 15 securities filing.

Boeing also filed separate documents as a precursor to raising up to $25 billion in additional funds through the sale of stock or the issuance of unsecured debt – a so-called “registration.”

“These are two prudent steps to support the company’s access to liquidity,” Boeing said.

The new $10 billion credit facility “provides additional near-term access to liquidity as we navigate a challenging environment.” “The company has not drawn on this facility or its existing credit revolver,” Boeing adds.

“Registering” for up to $25 billion in additional funding gives Boeing “flexibility” to raise more money if needed over three years.

The upcoming capital increases come as Boeing faces an increasingly worrisome financial situation, largely due to a strike by the 33,000-member machinists' union that has forced Boeing to halt production of the 737, 767 and 777. The workers resigned from their jobs on September 13, more than four weeks ago.

Boeing's finances have also been hit by a myriad of other problems in recent years, most notably problems with production quality.

Boeing disclosed the financial impact of the strike on Oct. 11 when it reported preliminary third-quarter results, saying it lost more than $6 billion in the period. That day, Boeing also announced that it would lay off approximately 17,000 workers (10% of its global workforce) and halt production of the 767. In addition, the expected entry into service of the 777-9 has been postponed by one year to 2026.

Boeing ended September with $10.5 billion in cash and investments in marketable securities – about the minimum financial analysts estimate Boeing needs to operate.

Financial firm Jefferies estimates the strike is costing Boeing $1.3 billion a month.

The company plans to report its full third-quarter results on October 23.