Boeing Secures More Than $12 Billion In Financing to Help Weather 737 Max Crisis (excerpt)
The manufacturer was trying to secure a loan of at least $10 billion, CNBC reported last week. Boeing declined to comment.
The two crashes — a Lion Air flight in Indonesia in October 2018 and an Ethiopian Airlines flight last March — together killed all 346 people on board. The crashes handed Boeing one of the biggest crises in its more than 100-year-history, one that has rippled through its supply chain and to its airline customers.
The size of the loan, at least $2 billion more than originally sought, is a vote of confidence in the manufacturer from lenders. Boeing is expected to detail its financing strategy when it reports earnings before the market opens on Wednesday. (end of excerpt)
Click here for the full story, on the CNBC website.
(EDITOR’S NOTE: Boeing CEO Dave Calhoun said last week that the company will not cut its dividend, saying that “I believe we have the financial capacity and capability to do the things we need to do ... but the recovery, when we get to the end and start shipping airplanes, etc., supports maintaining our dividend.”
Last year’s final dividend was $3.29 billion.
That raises the question of whether the new loan is not intended to pay for at least part of the dividend, since Boeing has been bleeding cash because of the 737 Max crisis and the aircraft’s grounding.
The grounding has already cost Boeing $15-$20 billion, the Financial Times reported last week, and each additional month of grounding adds about $1.5bn, said Bank of America Merrill Lynch, while Fitch estimates its debt almost doubled last year to $27 billion.)
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