2024-10-29 21:09:00
The American plane maker on Monday announced its goal of raising capital by $19 billion through the issuance of shares. Now he expects another two billion dollars.
Burdened by production problems and a major strike that began in mid-September, Boeing increased this Tuesday, October 29, the size of the capital increase intended to replenish its coffers, which should earn it at least 21 billion dollars. The American plane maker, however, had announced the day before its intention to issue 90 million new shares and $5 billion in depositary receipts, or about $19 billion based on the stock price. Management had specified that in case of oversubscription, 13.5 million shares and $750 million in additional certificates could be added.
The aviation giant announced Tuesday that the unit price of the shares offered was $143 – Monday’s closing price was $150.69 – and that it will ultimately sell 112.5 million of them. That is to say a revenue of approximately 15.81 billion dollars, to which must be added the proceeds deriving from the sale of certificates of deposit. This should then generate “about” $21 billion, Boeing said.
This amount could even exceed $24 billion in case of strong demand, with buyers having 30 days to subscribe for an additional 16.87 million shares and 750 million certificates. That’s almost 3.2 billion more. At around 17:30 GMT, Boeing shares rose 2.56% on the New York Stock Exchange. Since the beginning of the year it has lost 40.75%. “This transaction is one of the prudent steps in our overall plan to repair our balance sheet and provide the liquidity needed to operate in our current environment”Boeing said in a separate press statement.
Cash and debts
“The significant demand for our offering demonstrates the market’s confidence in our recovery and long-term future”added the group, specifying that the amount collected will be used in the short term to cover its liquidity needs and debt maturities. According to analysts at Bank of America, Boeing will have to repay $4.3 billion in 2025 and almost $8 billion in the first half of 2026. And it is in the process of buying Spirit Aerosystems, a key supplier to which it has granted its independence in 2005. The deal, announced in early July, is expected to be finalized by mid-2025.
On October 15, Boeing announced its intention to increase its cash flow, notably announcing market calls of up to $25 billion over three years. It also obtained a second credit line of $10 billion. The buying window is expected to close on Wednesday for stocks and Thursday for certificates, according to the document filed with the SEC, the US stock market regulator. “We intend to use the net proceeds from these (offerings) for general corporate expenses.”the group explained in a stock exchange filing on Monday.
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