The company filed with regulators on Tuesday to sell any combination of bonds and shares, known as a shelf registration. Boeing is looking to shore up its balance sheet and boost access to cash, as it tries to avoid getting cut to junk status by bond graders and facing much higher borrowing costs.

“This universal shelf registration provides flexibility for the company to seek a variety of capital options as needed to support the company’s balance sheet over a three year period,” Boeing said in a statement.

The company said that it has a separate new credit agreement in place for $10 billion, giving it “additional short term access to liquidity as we navigate through a challenging environment.”
The added firepower will help Boeing improve its bargaining position with striking workers, who have halted production at key Seattle-area facilities for weeks. Union members are seeking higher wages and a reinstatement of pensions, and talks broke down last week again as both sides dug in on their demands.

The company is also working through quality issues on its top-selling 737 Max jets, under the supervision of regulators who have capped production. The long-delayed 777X program was pushed back further last week as well, to 2026.

Bloomberg reported this month that Boeing was considering a capital increase of at least $10 billion, citing people familiar with the discussions. Should Boeing proceed, a sale of that magnitude would stand to be the biggest by a public company since Saudi Arabian Oil Co.’s $12.3 billion sale in June.
“The strike is still going on with no end in sight, so it could definitely be downgraded,” said CreditSights analyst Matt Woodruff said of Boeing’s credit rating. “This buys them a little bit of time.”

Boeing shares rose less than 1% at 10:48 am in New York, as investors weighed the impact of potential dilution along with a stronger balance sheet. The stock has lost 43% in value this year, the second-worst performance among the members of the Dow Jones Industrial Average.

Credit facility
The company has 120 days to draw on the new credit, and any outstanding loans mature within 364 days of the agreement, according to a filing. Boeing hasn’t drawn on the new facility or its existing revolving line, it said. If the planemaker were to tap the new facility, and then raise capital publicly or sell assets, it has to pay back the credit facility immediately.

The shelf registration gives Boeing a number of options for raising money, including selling any combination of common shares, preferred shares, senior bonds and subordinated bonds, among other instruments.

The manufacturer is working to stave off potential ratings downgrades from Moody’s Ratings and S&P Global Ratings, which have both said within the last five weeks that they might cut Boeing’s credit grades to junk status, steps that would boost the company’s interest costs in short order and make Boeing a less attractive investment for some funds.

Boeing revealed late last week that it has only a small buffer on top of the $10 billion of cash and short-term securities that it needs to avoid slipping to junk status. The strike by members of a machinist union in the Pacific Northwest, a crucial hub of Boeing aircraft production, is costing the company more than $1 billion a month even after cost-saving moves, according to an estimate from S&P last week.

The strike is just one of a series of mishaps for a company that has been suffering all year. In January, a freak accident blew a door-size hole into the fuselage of an airborne 737 Max, forcing the company to slow production to fix problems with its manufacturing process. The stock is heading for its worst annual performance since the 2008 financial crisis, and Boeing said last week that it plans to cut 10% of its workforce, equivalent to about 17,000 people.

Rating review
While Boeing finds itself in a protracted crisis, the company still has longer-term prospects. It has a backlog of 5,490 aircraft, representing about half a trillion dollars worth of revenue. That may give investors confidence that cash will flow again once the company gets production back in shape.

And airlines and leasing firms have few alternatives if they want to buy large commercial jetliners: Boeing is part of a global duopoly with Airbus SE.

Obtaining the loan shows that banks are still willing to lend to Boeing. But if the company were to draw on the loan, it would add debt to its balance sheet, which it’s trying to avoid.

There is some precedent for Boeing’s new credit agreement. In early 2020, during the early part of the pandemic, the company entered into a $13 billion credit agreement, in the form of a delayed-dra

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A bench comprising Justices B.R .Gavai and Sandeep Mehta ordered that Prabir Purkayasta be released subject to him furnishing surety and bail bond.The court gave the order pointing out that a copy of the remand application was not provided to Purkayasta thereby violating principles of natural justice.

” Copy of the remand application was not provided to the appellant . This vitiates the arrest of the appellant following Pankaj Bansal case ” the order said.

” Though we would have released him without surety , but since chargesheet has been filed , we release him with surety and bail bond , ” the order stated

During the hearings the judges had raised questions on how the remand hearing was conducted without informing Purkayast’s lawyer in advance and in effect, without an audience. The court had also observed that the remand order was passed before Purkayasta or his counsel were informed as to why he was arrested.

The Court had also grilled the counsel for Delhi Police as to why no advance notice was given to Purkayast’s lawyer about his remand.

Purkayasta was arrested on 3 October 2023 under UAPA following series of raids on the offices of Newsclick and journalists associated with the news organization. The arrest was made in the wake of allegations in an article in the New York Times which alleged that NewsClick was being paid huge sums  to carry on Chinese propaganda. NewsClick Human Resources head Amit Chakraborty was also arrested in the case.

According to the First Information Report NewsClick allegedly received crores of rupees in foreign funds to ” disrupt the sovereignty , unity and security of India.”  The charges against Purkayasta included that NewsClick tried to show Kashmir and Arunachal Pradesh as not parts of India ,  descrediting the the government’s fight against COVID 19 , funding the farmers agitation against the now withdrawn controversial farm laws and putting up a spirited defence of legal cases against Chinese telecom companies.

After their arrest both Purkayasta and Chakraboty moved the Delhi High Court challenging their arrest and remand under UAPA.They argued that the arrest and remand were illegal because they were not given the grounds for the arrests in writing in violation of Supreme Court order in the Pankaj Bansal case .

The Delhi High Court , however rejected the argument and held that the Pankaj Bansal judgment is not applicable to arrests made under the UAPA leading to the appeal in the Supreme Court.The  Supreme Court quashed and set aside Purkayast’s arrest , the remand order of 4, October 2023 and the Delhi High Court order of 13 October 2023 that upheld the arrest.

Clarifying the scope of the Court’s ruling on 3 October 2023 in the Pankaj Bansal vs Union of India case where it said that the Enforcement Directorate ( ED ) should furnish the grounds of arrest under the Prevention of Money laundering Act ( PMLA) in writing to an accused at the time of arrest , the bench said this should ” APPLY IN ALL CASES OF ARREST”.

” We find that the provision regarding the communication of the grounds of arrest to a person arrested contained in in Section 43 B (1) of the UAPA is verbatim the same as that in Section 19 (1) of the PMLA .” the order pointed out.

” Upon careful perusal of the statutory provisions …we find that there is no significant difference in the language employed in Section 19(1) of the PMLA and Section 43’B(1) of the UAPA which can persuade us to take a view that the interpretation of the phrase ” inform him of the grounds  for such arrest ” made by the court in the case of Pankaj Bansal …should not be applied to an accused arrested under the provisions of the UAPA.”

In this context the Supreme Court pointed out that Article 22 (1)of the Constitution says ” no person who is arrested shall be detained in custody without being informed , as soon as may be , of the grounds for such arrest nor shall he be denied the right to consult , and to be defended by a legal practitioner of his choice.”

The order further said that ” the purpose of informing to the arrested person the grounds of arrest is salutory and sacrosanct in as much as , this information would be the only effective means for the arrested person to consult his Advocate; oppose the police custody remand and to seek bail. Any other interpretation would be tantamount to diluting the sanctity of the fundamental right guaranteed  under Article 22(1) of the Constitution of India.”

The commenting on the lapses in procedure followed by the Delhi Police in this case the Supreme Court said that the copy of the FIR was provided to Shri Akashdeep Khurana , learned Advocate representing the accused for the first time on 5 October 2023 and hence till the time of being deprived of liberty , no communication was made to the appellant regrading the grounds on which he had been arrested. Thus by the time the Advocate engaged by the accused appellant had been informed , the order of remand had already been passed. Unquestionably , till that time the grounds of arrest had not been conveyed to the appellant in writing ” the order said .

The Supreme Court further said that the arrest memo only contains the reasons for arrest but not the grounds of arrest . ” There is a significant difference between the phrases ‘ reasons for arrest ‘ and ‘ grounds of arrest ‘ The reasons for arrest are formal parameters .

” These reasons would commonly apply to any person arrested on charge of a crime whereas the ‘grounds of arrest’ would be required to contain all such details in hand of the Investigating Officer which necessitated the arrest of the accused. Simultaneously , the grounds of arrest informed in writing must convey to the arrested accused all basic facts …the ‘ grounds of arrest ‘ would invariably be personal to the accused and cannot be equated with the ‘ reasons of arrest ‘ which are general in nature ” the court said.

Ends…

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