Boeing in Crisis, Plans to Raise 26 Trillion Won Through Stock Sales and More

Credit Rating Downgrade Risk Due to Government Investigation and Strike Impact

U.S. aircraft manufacturer Boeing announced plans to sell $19 billion (approximately 26.2941 trillion KRW) worth of shares, Bloomberg reported on the 28th (local time). This move aims to secure liquidity and prevent a credit rating downgrade amid difficulties in manufacturing caused by investigations following aircraft accidents and union strikes.

Boeing stated that it plans to sell 900,000 shares of its common stock and $5 billion (approximately 6.9185 trillion KRW) worth of depositary shares.

Based on the closing price of $155.01 on the 25th, the common stock sale alone will raise $14 billion (approximately 19.3718 trillion KRW). This is the largest fundraising in the U.S. stock market since SoftBank Group sold part of its T-Mobile stake in 2020.

On the day, Boeing’s stock closed down 2.8% at $150.69 per share. The stock has fallen by 42% so far this year.

Bloomberg projected that the total fundraising amount could increase to $21.8 billion (approximately 30.169 trillion KRW).

Boeing is facing disruptions in manufacturing its 'cash cow,' the 737 Max passenger aircraft, as union strikes enter their seventh week amid intense investigations by authorities following a series of aircraft accidents. Consequently, the company’s financial situation has worsened, putting its credit rating at risk of being downgraded to speculative grade.

The Boeing union recently voted down the company’s proposal to increase wages by 35% over the next four years, continuing the strike.

Bloomberg forecasted that a substantial amount of funds will be needed to resume aircraft production even after the strike ends, estimating about $4 billion will be required in the fourth quarter alone, with approximately $14 billion needed throughout this year. Bloomberg assessed that if this fundraising succeeds, it could at least temporarily ease the urgent financial pressure.

Earlier this month, Boeing received regulatory approval to raise $25 billion in new capital to maintain its credit rating. The company also planned to cut 17,000 employees, about 10% of its total workforce, to reduce costs.

This content was produced with the assistance of AI translation services.