Boeing (NYSE:BA) is reported to be in talks with banks to secure a loan of $10 billion or more, as the company faces rising costs stemming from two fatal crashes of its 737 Max planes.
The reports also said the plane maker has secured at least $6 billion from banks so far, and is talking to other lenders for more contributions.
Another source said the total amount could rise if there is additional demand from banks.
Analysts opine that liquidity isn’t an immediate concern, but the new debt shows Boeing is shoring up its finances amid the cash-sapping fallout of the two crashes — one in Indonesia in October 2018 and another in Ethiopia in March last year — that killed all 346 people aboard the two flights.
The amount Boeing is seeking to borrow is more than what some analysts were expecting. For example, Jefferies earlier this month forecast Boeing would issue $5 billion in debt this quarter.
But the jets’ return has faced potential new delays that are threatening to drive up Boeing’s costs, including a new software issue disclosed by the company last week.
Boeing has developed a software fix for the planes after a flight-control system was implicated in the crashes but regulators have not yet signed off on that or completed other checks that would allow them to certify the planes as safe to resume operations.
The company posted negative orders for aircraft last year, its weakest sales figures in decades, and handed the title of the world’s biggest aircraft manufacturer over to its European rival Airbus.
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