US aircraft manufacturer Boeing Co. has received more than $12 billion in financing commitments from more than a dozen banks that will help alleviate the planemaker’s financial crisis over its 737 MAX jet, the design which was grounded after two deadly crashes in March last year.
As per a CNBC report, Boeing was trying to secure a loan of at least $10 billion. Instead, it received $2 billion more than it initially sought, which shows a vote of confidence in the company from the lenders.
Boeing’s 737 MAX was grounded after two crashes—October 2018’s Lion Air flight in Indonesia and the Ethiopian Airlines flight from March last year—killed total of 346 people on board. The crash resulted in the grounding of the aircraft. But since the Federal Aviation Administration (FAA) has extended the grounding Boeing was forced to seek loans to cover its debt.
The details of the loans and other financing strategies will be finalized before the market opens on Wednesday.
The financing is being led by Citigroup Inc. and it will be a two-year delayed-draw loan structure, Bloomberg reported. This means that the aircraft manufacturer does not have to use it all immediately and is expected to have a margin of 100 basis points over LIBOR.
Meanwhile, no official statement was released from Boeing.
(With input from agencies)