Investing.com — Spirit AeroStrategies (NYSE:SPR) on Tuesday, November 5, raised issues about its ability to proceed operations, sparking questions regarding the implications for Boeing (NYSE:BA)’s deliberate acquisition.
In its third-quarter financial report, the aerospace producer disclosed “substantial doubt about the Company’s ability to continue as a going concern exists.”
“The Company will require additional liquidity to continue its operations over the next 12 months,” the submitting added.
Spirit AeroStrategies reported important net losses of $1.5 billion year-to-date, with cash utilized in operations amounting to $1.25 billion. As the third quarter concluded, Spirit’s debt stood at $4.4 billion, with cash and cash equivalents at a mere $217.6 million.
The agency moreover anticipates a cash burn of roughly $450 to $550 million over the approaching three quarters.
The agency’s financial challenges are partly attributed to points with Boeing and Airbus.
More concretely, the jet supplier has been affected by Boeing’s dedication to reject deliveries that require additional assembly or top quality rework, leading to elevated inventory and contract property, along with decreased cash transfer.
Other contributing components embrace delays in Boeing’s manufacturing ramp-up, a strike at Boeing, and ongoing pricing adjustment discussions with Airbus.
The submitting comes amid ongoing discussions about its acquisition by Boeing. According to Bank of America analysts, the full have an effect on of Spirit’s newest submitting on the acquisition’s financial components isn’t however clear.
“We would assume that Boeing will likely have to inject capital to Spirit,” analysts led by Ronald J. Epstein talked about in a phrase.
In April 2024, Boeing supplied an advance of $425 million to Spirit AeroStrategies to bolster its liquidity, and in keeping with BofA analysts, extra capital injections may be on the horizon.
Last month, Spirit raised higher than $24 billion. It moreover confirmed it had completely drawn a $350 million bridge mortgage established when Boeing agreed to build up the company in June.
Bank of America maintained a Neutral rating on Boeing, as a result of the enterprise awaits extra particulars.
In the meantime, Boeing continues striving to restart 737 MAX manufacturing following the choice of a weeks-long strike that ended Monday (NASDAQ:MNDY) night. The strike, involving over 33,000 West Coast employees, had halted manufacturing of most of Boeing’s enterprise jets, along with the 737 model.
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