By David Shepardson and Allison Lampert
(Reuters) -Spirit AeroSystems said Tuesday that planemaker Boeing will pay up to $350 million in advance payments to the firm, providing the struggling supplier a lifeline as it continues to burn cash after four consecutive years of losses.
Reuters had reported last week that Spirit and Boeing were close to reaching a funding agreement as Spirit Aero is juggling financial and production challenges, having issued a “going concern” warning last week. The fuselage supplier expects to burn around $450 million to $500 million over the last three months of 2024 and first half of 2025, according to filings.
“This agreement helps improve our liquidity. We continue to pursue a range of options to address our financial and spacing storage constraints and are working with our customers on these matters,” Spirit spokesperson Joe Buccino said.
Spirit said the advanced payments are to produce Boeing products at the rates required by the planemaker, and “to address Spirit’s high levels of inventory and lower operational cash flows, decrease in expected deliveries to Boeing and higher factory costs to maintain rate readiness, and lingering effects brought on by the recent strike by Boeing employees.”
Spirit, which must repay the $350 million in 2026, saw its shares rise 1.2%.
Boeing, which plans to buy its one-time subsidiary, is trying to revive its battered supply chain and jet production after a 53-day strike halted most of its output. Boeing has said it plans to gradually resume production of its 737 MAX as machinists are set to return to their jobs Tuesday.
Spirit previously disclosed it drew down a $350-million bridge loan set up when Boeing agreed to acquire the supplier, and previous advances from Boeing and rival Airbus that Spirit has not repaid.
Spirit Aero’s finances suffered when Boeing MAX production slumped after a Jan. 5 mid-air blowout on a new model. A new process for vetting fuselages for flaws introduced in March further delayed Spirit’s deliveries, leading to a pile-up of fuselages inside and outside the supplier’s sprawling Kansas factory.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Arun Koyyur and Nick Zieminski)
