Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Boeing seeks to borrow $10 billion or more amid 737 MAX crisis: source

Stock MarketsJan 20, 2020 04:04PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By David Shepardson

WASHINGTON (Reuters) - Boeing Co (N:BA) is in talks with banks about borrowing $10 billion or more amid rising costs for the U.S. planemaker after two crashes involving its 737 MAX jetliner, a source told Reuters on Monday.

CNBC first reported the news on Monday, citing sources that Boeing has so far secured at least $6 billion from banks and is talking to other lenders for more contributions.

A source confirmed the talks to Reuters, but it was still not clear how much Boeing would seek to raise and whether it would pursue the selling of new bonds. One key issue for Boeing is flexibility since it is not clear how long the 737 MAX will remain grounded.

Boeing declined to comment.

Reuters reported on Friday that the Federal Aviation Administration is now unlikely to approve the plane’s return until March, but that could take until April or longer.

Boeing confirmed on Monday that it temporary halted production of the 737 MAX in Washington State in recent days. The company had said in December it would halt production at some point this month.

"MAX production has now been temporarily suspended inside the 737 factory. The Renton site remains open as our teams focus their work on several quality initiatives," Boeing said, referring to its facility in Renton, Washington.

Boeing does not get paid until it delivers the planes it manufactures.

The company has estimated the costs of the 737 MAX grounding at more than $9 billion to date, and is expected to disclose significant additional costs during its fourth-quarter earnings release on Jan. 29. Boeing faces rising costs from halting production of the plane this month, compensating airlines for lost flights and assisting its supply chain.

Analysts estimate that Boeing has been losing around $1 billion a month because of the grounding. It reported an almost $3 billion negative free cash flow in the third quarter.

Boeing also reported its worst annual net orders in decades last week, along with its lowest numbers for plane deliveries in 11 years.

On Friday, Boeing said it was addressing a new 737 MAX software issue discovered in Iowa during a technical review of the proposed update for the plane.

Last week, American Airlines Group Inc (O:AAL) and Southwest Airlines Co (O:AAL) both said they would extend cancellations of 737 MAX flights until early June.

Also this month, the FAA and Boeing said they were reviewing a wiring issue that could potentially cause a short circuit on the 737 MAX.

Boeing seeks to borrow $10 billion or more amid 737 MAX crisis: source
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Gary Friauf
Gary Friauf Jan 20, 2020 8:49PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Unfortunately I think the $320 support level fails this week. I hope I'm wrong because I think the market pulls back with it.
Gary Friauf
Gary Friauf Jan 20, 2020 8:49PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Well that was a good call if I do say so myself.
Gold Fever
Gold Fever Jan 20, 2020 6:28PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Just give Jerome a call, he’ll probably give you 20 billion, interest free
Jon Benton
Jon Benton Jan 20, 2020 4:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
10 Bil. isn't picked up from a walk around the Supermarket off a shelf ?! Buffet has been "Supposedly" thinking of investing in this company but how many more are liable to take the risk ?! until they clear up their mess not many !!!
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email