11:32 AM EDT, 10/28/2024 (MT Newswires) -- Boeing ( BA ) announced an offering of 90 million common shares as it seeks to raise capital amid an ongoing labor strike that has adversely impacted the jet manufacturer's financial position.

Boeing ( BA ) is also offering $5 billion of depositary shares, each representing an interest in a convertible preferred share. The offerings' underwriters will likely have an option to purchase up to an additional 13.5 million common shares and $750 million of depositary shares.

The company intends to use proceeds for general corporate purposes, potentially including paying down debt and covering capital expenditures. Shares of Boeing ( BA ) fell 0.3% in Monday trade, and are down 41% year to date.

The International Association of Machinists and Aerospace Workers' members rejected Boeing's ( BA ) most recent labor contract proposal last week, prolonging a work stoppage that began in September.

"We currently are unable to predict the duration of the strike," Boeing ( BA ) wrote in Monday's prospectus supplement. "As a result of the strike, production of our commercial aircraft, other than the 787 production in Charleston, and certain of our Defense, Space & Security products has halted, adversely impacting our business and financial position."

Boeing ( BA ) last week reported negative free cash flow of $1.96 billion, a sharp deterioration from negative $310 million in the same quarter of 2023. "Given the strike and our need to conserve cash, we've made near-term adjustments to broadly stop supplier shipments," Chief Financial Officer Brian West said Wednesday on an earnings conference call, according to a Capital IQ transcript.

The company said in Monday's prospectus supplement that it expects "further significant negative operating cash flows in this quarter and in future quarters" until the union workers return to work.

Boeing ( BA ) reported a wider-than-expected third-quarter loss on Wednesday. Earlier this month, Boeing ( BA ) disclosed plans to lay off about 10% of its workforce in the coming months.

"We continue to manage supplier by supplier based on inventory levels and for certain suppliers, this will allow them to catch up," West told analysts last week. "We maintain our objective to position the supply chain to support our ramp post strike."

In 2025, free cash flow is expected to be "significantly better" than 2024 levels, likely turning positive in the second half, West said at the time.

Price: 154.18, Change: -0.83, Percent Change: -0.54