Boeing shares dip premarket on report planemaker is weighing $10 bn stock sale
Investing.com — Shares in Boeing Co (NYSE:BA) dipped in premarket US trading on Tuesday after Bloomberg News reported that the aerospace giant is mulling possibly raising at least $10 billion from selling new stock.
Citing people familiar with the discussions, Bloomberg said the company is working with its advisors on its options.
However, Boeing is unlikely to roll out the equity raise for at least a month, Bloomberg reported. It added that Boeing, which faces a strike by 33,000 workers in the US Pacific Northwest, would like to understand the financial implications of the walkout.
No final decision on timing or amount has yet to be made, and Boeing could still end up opting not to go ahead with fundraising drive, the report noted.
The size of the possible move reported by Bloomberg would be the largest by a public company since a $12.3 billion stock sale by Saudi Aramco (TADAWUL:2222) in June.
The workers — now on strike for a third week — have rebuffed two pay proposals from Boeing, prolonging the labor action and placing further pressure on the jetmaker’s finances and production during a time when its safety record is already under intense scrutiny. Boeing’s credit rating is also hovering at close to junk status, Reuters reported.
Boeing Chief Financial Officer Brian West has warned that the work stoppage may crimp the company’s supply chain as well.
Last week, Boeing said it had put forward a sweetened deal to the workers that would have included a 30% general pay bump over four years and an improvement in retirement benefits. Boeing said it was its “best and final” offer.
However, the International Association of Machinists and Aerospace Workers District 751, which represents the workers, rejected the approach, saying it was “thrown at us” by Boeing without prior negotiations.
A mediator has been engaged to help break the impasse, Bloomberg reported.
