[Asia Economy Reporter Jeong Hyunjin] American aircraft manufacturer Boeing is reportedly considering issuing additional bonds to address the financial burden caused by the suspension of 737 Max operations, the Wall Street Journal (WSJ) reported on the 6th (local time), citing sources.
Experts expect Boeing to raise an additional $5 billion through bonds, WSJ reported. This measure takes into account the estimated $15 billion in expenses to be incurred in the first half of this year. Boeing is also planning to abandon its plan to acquire an 80% stake in Brazilian aircraft manufacturer Embraer SA for $4 billion.
The amount of bonds issued by Boeing stood at approximately $25.9 billion as of the third quarter of last year. Boeing held about $20 billion in cash assets as of the end of September last year, so WSJ expects that there will be no immediate cash shortage. However, following a series of crashes last year, the 737 Max has been banned from operation worldwide, increasing the associated financial burden.
Boeing is negotiating compensation for airlines affected by the suspension of 737 Max operations and is in the process of reaching settlements with the families of 346 deceased victims. On the same day, American Airlines, Aero AeroMexico, and Boeing announced that they had concluded compensation negotiations related to damages caused by the 737 Max.
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