Investing.com-- Boeing Co (NYSE:BA) is planning to launch a $15 billion capital raise by as soon as Monday, media reports have said, as the planemaker grapples with a debilitating strike and falling cash levels.
Reports over a potential fundraising have picked up in recent weeks, as the work stoppage involving roughly 33,000 employees has caused the group to bleed cash for over a month.
Boeing reportedly received approval from the Securities and Exchange Commission to raise up to $25 billion. The aerospace giant is also seeking to avoid a potential downgrade of its credit rating to junk.
Last week, the workers rejected a revised contract offer from Boeing, placing further pressure on new CEO Kelly Ortberg's plans to overhaul its operations.
Of the members of the International Association of Machinists and Aerospace Workers District 751 who voted, 64% said no to the fresh offer, which would have raised their pay by 35% over the next four years and provided greater retirement benefits. Following the decision, union leaders -- who have called for a 40% pay bump and the return of defined-benefit pensions -- said they were ready to return to the negotiating table with Boeing.
Meanwhile, Ortberg called for a "fundamental culture change" at Boeing, which has also faced recent scrutiny over its safety record following a dangerous mid-air door plug blow-out on one of its planes earlier this year. Ortberg added the firm is at a "crossroads" after it posted a net loss of $6.17 billion in the third quarter, widening from a loss of $1.64 billion in the corresponding period in 2023.
Ortberg noted that "serious performance lapses" had chipped away at customer trust and contributed to its increasing debt pile.
At the same time, Chief Financial Officer Brian West warned analysts that the firm would keep hemorrhaging cash in the final three months of 2024 and into 2025.
Shares in Boeing, which have slumped by over 38% so far this year, were slightly lower in premarket US trading on Monday.
(Ambar Warrick contributed reporting.)