Boeing Co. is exploring the possibility of raising approximately $10 billion by issuing new stock, as reported by Bloomberg. The move is aimed at replenishing the company’s cash reserves, which have been significantly depleted due to an ongoing strike involving about 33,000 workers and production halts of its best-selling 737 MAX jet.

The planemaker has been working with financial advisers to evaluate its options, though no final decisions on the timing or the exact amount have been made. It is anticipated that any potential equity sale would take place after a month, allowing Boeing to first assess the financial impact of the strike. Boeing has not officially commented, but industry analysts had previously suggested that the company would need to raise between $10 billion and $12 billion by the end of the year to cover its cash flow requirements.

Boeing's financial woes have been compounded by a series of setbacks. Most notably, a January incident where a door panel blew off a new 737 MAX model mid-air led to a production slump and increased scrutiny. The financial strain was further exacerbated by the strike initiated by the International Association of Machinists and Aerospace Workers in the Seattle and Portland areas.

The company reported losing over $7 billion in operating cash flow in the first half of 2024, with analyst estimates from JP Morgan Chase & Co. suggesting each month of the strike could cost Boeing an additional $1.5 billion. The strike and production delays have led to a sharp decline in Boeing's stock, making 2024 one of its worst years since the 2008 financial crisis. Shares had dropped by 1.3% in premarket trading following news of the possible stock sale.

As Boeing’s Chief Financial Officer Brian West mentioned last month, the company is committed to preserving its investment-grade credit rating and repairing its balance sheet. West indicated that Boeing is open to raising either debt or equity to bolster its financial position. Boeing has implemented several cost-saving measures such as furloughs, a hiring freeze, and executive pay cuts. The company raised $10 billion earlier this year after its first-quarter earnings release and typically moves to secure additional funds following its earnings reports, with the next one expected in late October.

The ongoing strike, production halts, and upcoming debt maturities have placed Boeing in a precarious financial situation. About $4.6 billion in bonds and loans are due by the end of 2025, and the company is burning through its cash reserves at an alarming rate. These financial strains have also raised concerns about a potential credit downgrade from Fitch Ratings, which had cautioned about the serious operational and financial consequences of an extended strike.

In addition to raising equity, Boeing is also grappling with a $4.7 billion acquisition deal for Spirit AeroSystems Inc., a key supplier. While this acquisition is expected to be paid in stock, it will require further investment to ensure a successful turnaround.

In conclusion, Boeing is likely to proceed with a $10 billion stock sale to navigate its current financial challenges, but the timing will depend on the resolution of the ongoing strike and stabilization of production. The company is taking steps to maintain liquidity, and while the potential stock sale may provide some relief, Boeing's broader financial strategy will need to address both immediate cash flow needs and longer-term commitments.