Boeing Co. BA is reportedly gearing up to launch a capital raise exceeding $15 billion, potentially starting as soon as Monday. The aerospace leader seeks to bolster its financial standing, which has been under pressure due to an ongoing strike.
What Happened: The capital will be raised through a mix of common stock and convertible preferred shares, according to a Reuters report citing people familiar with the matter. The total amount could be adjusted based on market demand.
The company has been grappling with issues, including a machinists’ strike that has disrupted 737 MAX production and regulatory scrutiny following a midair incident involving a 737 MAX aircraft.
Recently, Boeing reported a $6 billion quarterly loss and secured a $10 billion credit agreement with major banks such as Bank of America, Citibank, Goldman Sachs, and JPMorgan Chase & Co. to support its financial needs.
Boeing declined to comment on the matter in response to Benzinga’s queries.
Why It Matters: Boeing’s financial challenges have prompted the company to consider selling off major assets to remain competitive in a tough market. The company is exploring divestitures of non-core or underperforming units, including a small defense unit that produces surveillance equipment for the U.S. military.
Despite these hurdles, a Goldman Sachs analyst remains optimistic about Boeing’s long-term prospects. The analyst reaffirmed a Buy rating on Boeing’s stock, citing the company’s robust aircraft demand, planned capital raise, and new leadership focused on operational improvements as key factors for a potential recovery in the coming year.
Price Action: Boeing’s shares were up 0.92% at $156.44 during pre-market hours on Monday, as per Benzinga Pro data.
Read Next:
Image Credit: Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
