Boeing announced Oct. 28 plans to launch a stock offering to raise up to $22 billion, a move intended to strengthen its financial position during a prolonged workers’ strike and maintain its investment-grade credit rating , as detailed in a Reuters report.

The strike, involving about 33,000 machinists’ union workers, began in September and halted production of key planes, including the highly profitable 737 MAX. As a result, the company’s financial health deteriorated significantly. Boeing plans to offer 90 million shares of common stock as well as $5 billion in mandatory convertible securities.

Ben Tsocanos, head of aerospace at S&P Global Ratings, commented on the implications of the offer, saying: “The offer is certainly supportive for credit quality. We will take this into account in our rating assessment in the context of continued negative free cash flow. “. Boeing has notably maintained its investment grade rating throughout its history.

Investor interest appears robust, with reports indicating the offerings are heavily oversubscribed, with the price likely close to the last closing price of $155 per share. In afternoon trading, shares fell 0.6 percent. If demand remains high, Boeing has the option to issue an additional 13.5 million shares and increase the mandatory convertible offering by an additional $750 million.

Additionally, as of Friday’s closing price, Boeing could potentially raise approximately $13.95 billion through the common stock offering, with an additional $2.1 billion if the offering is oversubscribed. The mandatory convertible offering could raise up to $5.75 billion, depending on a list of conditions, the Reuters report further details.

Pricing of the offerings is expected to take place after market hours on Monday. The mandatory convertible securities will be marketed to investors with a dividend range of 6.0 percent to 6.5 percent, as well as a premium of 17.5 percent to 22.5 percent based on the latest share price. closing for conversion on or before the October due date. 15, 2027.

Maintaining its investment-grade credit rating is crucial for Boeing, especially in light of warnings from rating agencies about possible downgrades due to the ongoing strike. Such downgrades could increase the cost of capital for the company.

Boeing has already faced difficulties due to a production cap imposed by regulators on its MAX jets following an in-flight incident earlier this year. In addition to labor unrest, the company reported a significant cash burn, including a $6 billion loss in the third quarter alone. The strikers recently rejected an improved contract offer, with their demands including a 40 percent pay increase and a return to a defined benefit pension plan, demands that Boeing is unlikely to meet.

Earlier this month, Boeing secured a $10 billion credit agreement and announced plans to raise up to $25 billion through various offerings. S&P warned that a rating downgrade could follow if Boeing’s cash balance fell below $10 billion or if the company increased its leverage to meet its debts.

As of September 30, Boeing had cash and marketable securities totaling $10.50 billion and faced debt maturities of $11.5 billion through February 2026, as well as commitments related to the acquisition of Spirit AeroSystems.

Proceeds from the latest offerings are intended for general business purposes, which may include debt repayment.