Spirit AeroSystems saw a 16 per cent decline in its shares during after-hours trading, following the company’s announcement of new measures aimed at raising capital.
The company unveiled plans for a public sale of $200 million worth of its Class A common stock and the issuance of $200 million in convertible debt maturing in 2028. Closing at $24.62, its shares plummeted to $20.68 after the announcement.
Specialising in the production of large aircraft structures for industry giants Boeing and Airbus, Spirit AeroSystems has grappled with production quality issues, causing delays in aircraft deliveries.
Factors such as inflationary pressures, supply chain constraints, and a surge in labour costs have contributed to a substantial $692 million net loss over the first nine months of 2023.
Despite a nearly 20 per cent decrease in its shares since the beginning of the year, the company experienced a modest recovery following the October revelation of a new agreement with Boeing. This agreement aimed to enhance Spirit AeroSystems’ near-term revenue by securing a higher price from Boeing for 787 Dreamliner components.
During a recent earnings call with investors, Spirit AeroSystems’ chief executive Patrick Shanahan, who became its interim chief executive in October, said reaching a similar pricing agreement with Airbus is an “item of utmost urgency.”
Chief financial officer Mark Suchinski said then that the company “continue(s) to evaluate all refinancing options to address debt,” including $1.2 billion of debt set to mature in 2025, “as well as our overall liquidity.”