Boeing has announced plans to raise around 19 billion dollars to stabilize its balance sheet and avoid a downgrade of its investment-grade credit rating. This move follows only two weeks after the notification that the US aircraft manufacturing company intends to raise up to 25 billion dollars in new capital and secure a 10 billion dollar credit line. These measures are intended to offset the financial strains exacerbated by the recent strike of its largest union.

The company plans to sell 90 million common shares worth nearly $14 billion, based on Friday's closing price of $155.01 per share. Additionally, $5 billion is to be invested in other securities that can be converted into preferred shares. The exact total of the capital increase was not disclosed, but the funds are intended for general corporate purposes.

This financing round is another step in Boeing's efforts to tackle a five-year crisis, exacerbated by fatal plane crashes, the worldwide grounding of the 737 Max, and the COVID-19 pandemic. As of the end of September, Boeing had $10.5 billion in cash and marketable securities, which is barely enough to maintain business operations. CFO Brian West recently stated that Boeing would continue to use up cash not only in 2024 but also in 2025.

The halt of production in Washington in September, triggered by the strike of 33,000 members of the International Association of Machinists and Aerospace Workers District 751, has further worsened the financial situation. The union rejected Boeing's latest offer, posing significant challenges for CEO Kelly Ortberg.

With a debt burden of $58 billion at the end of the quarter and a rating only one notch above junk status from the three credit rating agencies, securing an investment-grade rating is of utmost priority for Boeing. The delivery speed of commercial aircraft remains a crucial factor for the company's creditworthiness.

Jeremy Fielding, Director of Industrial Stocks at Jefferies, commented on the capital increase plan: “This was a key topic in our discussions prior to Boeing’s recent quarterly results and is likely to be traded at a fair price, as it was well anticipated and we see corresponding demand.”

Despite the planned measures, Boeing's stock price fell by up to 1 percent in New York on Monday. This underscores the ongoing uncertainties and the pressing financial challenges that the company continues to face.