BOEING and Airbus will provide more than US$450 million in financial assistance to help keep key supplier Spirit AeroSystems Holdings afloat ahead of their planned purchase of the company’s assets next year.
The US planemaker is providing a US$350 million advance to support the production of components for its commercial aircraft, Spirit disclosed in a filing on Tuesday (Nov 12). The money must be repaid to Boeing by the end of 2026, according to the filing.
Airbus is also setting up a US$107 million, non-interest bearing line of credit that Spirit can tap for advance payments, the Wichita, Kansas-based airplane structures manufacturer said in a separate filing. Airbus or an affiliate will assume the repayment obligations if the planned sale is completed, according to the documents.
Spirit this month said that a slowdown in deliveries to Boeing had impacted its liquidity and cash flow, leading to a “substantial doubt” about the aerospace supplier’s ability to continue to as a going concern. The company cited several factors, including the planemaker’s refusal to accept 737 Max fuselage sections from Spirit that need additional work in Boeing facilities, and the seven-week strike by 33,000 Boeing factory workers that just ended.
Spirit expects to burn through as much as US$500 million in free cash from the fourth quarter of this year through the second quarter of 2025.
Boeing has previously advanced cash to Spirit to keep it afloat. In April, the planemaker agreed to inject US$425 million into the supplier. Boeing is due to acquire most of Spirit in an all-stock deal that valued the supplier at US$4.7 billion.
The transaction, which reverses a split from the company almost two decades ago, is scheduled to close in mid-2025. As part of the deal, Airbus will also take over parts of Spirit that make components for its aircraft, and the European planemaker will pay a nominal price of US$1 for the assets, while receiving US$559 million in compensation.
Boeing ’s move to bring back Spirit into its fold came in the wake of the near catastrophic accident on Jan 5, in which a fuselage that had been assembled by Spirit lost a door-shaped panel during flight. That mishap triggered a chain reaction at Boeing, which has seen a wholesale management shakeup, federal investigations, and scrutiny from regulators.
Spirit is a key supplier for the 737, 787 Dreamliner and other Boeing commercial jets. The company also supplies parts to Airbus for its A220 and A350 models, as well as to Bombardier. BLOOMBERG
