Investing.com — Spirit AeroSystems raised concerns about its ability to continue operations in its third-quarter financial report. The aerospace manufacturer disclosed “substantial doubt about the Company’s ability to continue as a going concern exists” and stated that additional liquidity would be needed to sustain operations over the next 12 months.
Spirit AeroSystems reported significant net losses of $1.5 billion year-to-date and cash used in operations amounting to $1.25 billion. The company’s debt stood at $4.4 billion with cash and cash equivalents at $217.6 million. Anticipating a cash burn of $450 to $550 million over the coming three quarters, the company’s financial challenges are partly attributed to complications with Boeing and Airbus.
Boeing’s decision to reject deliveries requiring additional assembly or quality rework has impacted Spirit AeroSystems, leading to increased inventory and contract assets, as well as reduced cash flow. Other contributing factors include delays in Boeing’s production ramp-up, a strike at Boeing, and ongoing pricing adjustment discussions with Airbus.
The filing comes amid ongoing discussions about Spirit AeroSystems’ acquisition by Boeing. Bank of America analysts suggest that Boeing may need to inject capital into Spirit. In April 2024, Boeing provided an advance of $425 million to Spirit AeroSystems, and further capital injections may be necessary.
Last month, Spirit raised over $24 billion and fully drew a $350 million bridge loan established when Boeing agreed to acquire the company in June. Bank of America has maintained a Neutral rating on Boeing as the industry awaits further details.
Meanwhile, Boeing is working to restart 737 MAX production following the resolution of a weeks-long strike that ended Monday night. The strike, involving over 33,000 West Coast workers, had halted manufacturing of most of Boeing’s commercial jets, including the 737 model.