Boeing (BA, Financial) shares dropped 2.6% in premarket trade on Tuesday following the announcement that it intends to raise around $21 billion via public offers of common and depositary shares, above its initial $19 billion objective. The enlarged stock sales coincide with continuous difficulties Boeing faces, including a labor strike.
With pricing established at $143 per share to generate $15.81 billion, the offering climbed from the already stated 90 million to 112.5 million shares of ordinary stock. Through depositary shares, each representing one-twentieth of a share of recently issued convertible preferred stock, $5 billion was also raised.
Boeing plans to spend the money for broad business needs. Analysts think the money will enable the business to control its $57 billion in outstanding debt and keep running until jet deliveries begin again. With Boeing projecting more cash outflows over the following three quarters, its latest financial woes include a $6 billion deficit in Q3 and a $2 billion cash burn.
Beginning on September 13, the labor strike including over 32,000 machinists sought better pay and more benefits. Boeing is also grappling with production losses following a 737 Max door panel incident in January, which the Federal Aviation Administration caps output until quality control measures are enhanced.
