Boeing seeks $ 10 billion in loans as 737 Max crisis continues

Enlarge / Aircraft Boeing 737 Max.

Boeing aims to borrow $ 10 billion or more to help it weather the 737 Max crisis, CNBC reported today, citing people familiar with the matter.

“The company has secured at least $ 6 billion from the banks so far, people said, and is talking with other lenders for more contributions,” CNBC wrote. Citigroup, Bank of America, Wells Fargo and JPMorgan have already agreed to loan Boeing money.

A Boeing 737 Max crash killed 189 people in October 2018 and another accident killed 159 people in March 2019. The U.S. Federal Aviation Administration and governments around the world have ordered the grounding of the 737 Max after the March crash.

Planes are still grounded as Boeing struggled to fix its flight control software, known as the Maneuver Characteristics Augmentation System (MCAS). The last software problem was reported Friday; Boeing said it was “making the necessary updates and working with the FAA on the submission of this change, and keeping our customers and suppliers informed.”

Boeing’s indebtedness has already grown significantly over the past year. Boeing had $ 20.3 billion in long-term debt as of September 30, 2019, nearly double the $ 10.7 billion in long-term debt it had as of December 31, 2018, according to a Boeing SEC filing. In contrast, Boeing added less than $ 1 billion of long-term debt over the whole of 2017.

Boeing’s short-term debt and the “current portion of [its] long-term debt “added up to $ 4.4 billion as of Sept. 30. Boeing declined to comment on the $ 10 billion in new debt when contacted by Ars.

Big drop in income

Boeing reported in October Q3 2019 revenue of $ 20 billion, compared to $ 25.1 billion year-on-year. Revenue for the first nine months of 2019 was $ 58.6 billion, down 19% year-on-year. Net income in the third quarter of 2019 was $ 1.2 billion, compared to $ 2.4 billion in the third quarter of 2018.

In July 2019, Boeing announcement an after-tax charge of $ 4.9 billion to cover “potential concessions and other considerations to customers for disruption related to the 737 MAX grounding and associated delivery delays.”

CNBC described Boeing’s planned $ 10 billion loan as a two-year period, deferred edition loan that he “can tap into it later, a decision that may not immediately affect his credit rating like any other type of loan or bond.”

Boeing sacked CEO Dennis Muilenburg in December 2019 and replaced him by the former Chairman of the Board of Directors David Calhoun.

Source link

About Armand Downs

Check Also

26-year-old Kalamazoo man faces federal drug and weapons charges after ‘controlled purchase’ of crack cocaine

KALAMAZOO, MI – A man from Kalamazoo arrested last summer for allegedly threatening to kill …

Leave a Reply

Your email address will not be published. Required fields are marked *