(Reuters) – Boeing Co (BA.N) is planning to draw down the rest of a $13.8 billion loan it agreed last month, a source told Reuters on Wednesday, as the coronavirus outbreak adds to pressure on the U.S. plane-maker due to the grounding of its 737 MAX jets.
The source said that the company was taking the step because of overall market volatility and not due to the changing of the return to service date of its 737 MAX aircraft, which has been steadily pushed out and is now expected at earliest mid-year.
Boeing’s shares fell as much as 11% to $205.56 on news of the loan drawdown, initially reported by Bloomberg News, broadly in line with a collapse in airline and other aerospace shares across the board.
The planemaker may draw down the money as early as Friday, the source said.
Boeing had no immediate comment.
U.S. companies have been rushing to borrow more money and boost their cash coffers this week, as market turmoil fueled by a plunge in oil prices and the coronavirus outbreak raised the prospect of an economic downturn.
Airlines have been among the worst hit, as a collapse in bookings and business travel forced radical cuts in flight schedules, capacity and annual results forecasts.
Boeing’s total debt nearly doubled to $27.3 billion in 2019, as it compensated airlines and grappled with additional production costs for the 737 MAX even as the grounding prevented it from delivering the aircraft to buyers.
Media reported last month that the planemaker had raised a total of $13.825 billion in a fund raising round from lenders including Bank of China and PNC. Analysts estimated last year that the company was leaking around $1 billion monthly as a result of the MAX grounding.
Boeing, which has seen orders collapse in the face of the MAX crisis, said separately on Wednesday that it won 18 new orders for wide-body planes in February although MAX cancellations meant overall it lost 28 orders last month.
The planemaker has been encouraging customers to swap the MAX for more expensive 787 or 777 planes, but analysts say the cuts in capacity by airlines may weaken any such demand.
Boeing, which has said it expects the 737 MAX to be recertified by the middle of this year, is also facing the possibility of additional delays after it failed to win the backing of U.S. aviation regulators earlier this week to leave wiring bundles in place on the grounded plane.
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