Washington, Jan 28 (IANS) US aircraft manufacturer Boeing has obtained $12 billion in financing commitments from more than a dozen banks to help alleviate the crisis over its 737 MAX jet, the design of which was implicated in two deadly accidents that led to the aircraft’s global grounding.
Initially, corporate liquidity was not a concern for the company, but the fact that the Federal Aviation Administration (FAA) has extended the grounding forced Boeing to step up its search for loans to cover the debt it has accumulated after the two crashes in Ethiopia and Indonesia in which a total of 346 people died, reports Efe news.
According to a CNBC report on Monday, analysts have said that obtaining such a large amount of funding, $2 billion more than expected, was a vote of confidence on the part of Wall Street investors.
They also estimated that the firm has been losing about $1 billion a month because of the grounding after the pair of crashes.
In the third quarter, Boeing reported almost $3 billion in negative free cash flow.
The financing comes in the form ofDelayed Draw Term Loans, which the firm can access partially and as needed, with the prior agreement of the parties. These loans are generally provided only to borrowers with top credit ratings.
In recent months, Boeing has experienced assorted scandals linked to the 737 MAX that have undermined the company’s credibility and raised new questions about the safety of the aircraft.
Several weeks ago, internal Boeing communications were published within the framework of the investigation being undertaken by the US Congress that revealed a lack of confidence among technicians and employees about the safety of the 737 MAX.
In addition, an audit by the FAA earlier this month revealed new “potential” problems associated with the wiring that helps control the jet’s tail and the possibility that these problems could cause a short circuit if the wires were too close together.
Recently, Boeing also made a recommendation to pilots that would be flying the 737 MAX that they train first on simulators, a measure that they have resisted in the past.
On Wednesday, before the New York Stock Market opens, Boeing will announce its annual and fourth-quarter earnings and other figures, as well as a general outline of its financial strategy.