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Boeing's survival plan: Jetmaker eyes $15 billion financing push to offset strike amidst production woes and regulatory scrutiny

In a recent turn of events, jetmaker giant Boeing is preparing to sell about $15 billion in common shares and a mandatory convertible bond, four people familiar with the matter said. The financing is coming amid heightened financial pressures the aeroplane maker is facing because of ongoing crises that include an inhibiting strike and heightened regulatory scrutiny. But the timing of the sale is unclear.

On October 15, Boeing disclosed in regulatory filings that it may raise as much as $25 billion in stock and debt. However, one source added, that $15 billion may not be enough to solve all of Boeing's problems. "A $15 billion sale may not be enough for Boeing to address its ongoing crises," said the source.

Additionally, Boeing is exploring a deal with the help of structured finance, which would bring in up to $5 billion. The product might take the form of the securitization of a portion of one of its subsidiary's revenues, a separate source briefed on the company's plans said. Boeing was not immediately available for requests to comment on its securitization plan, which has not previously been reported.

The aerospace maker has faced significant tribulations throughout the year. In January, a door panel fell from one 737 MAX jet while in mid-air, further damaging Boeing's bruised reputation. Part of the firm's problem has also been its production-side issues, which have driven away customer confidence. Boeing shares were up 1% on October 16 but are down more than 40% this year.

Boeing has been spending their money and, hence, it announced on 16 October that it will raise more capital in the markets. Apart from this, the company also received a $10 billion credit deal from leading financiers including Bank of America, Citibank, and Goldman Sachs.

The banks' representatives are said to have been sounding out investor appetite for an offering of new shares and a mandatory convertible bond, a hybrid bond that must be converted into equity by a specified date. The deal will allegedly comprise new shares worth $10 billion and nearly $5 billion in convertible bonds.

Reports say the deal may be cut in the days following the expected release of Boeing's quarterly report on October 23. Still, the same source said the company wants to seal this deal before it resorts to hitting the picket line for funds, a walkout strike analysts surmised now costs Boeing tens of millions of dollars every day. With its credit rating at risk and losses mounting, the financing plan will stay at the centre of Boeing's rehabilitation process.