Spirit AeroSystems shares fall, company holds talks with Boeing about 737 MAX

SEATTLE (Reuters) – Shares in Spirit AeroSystems Holdings Inc (SPR.N) fell 13% on Tuesday after the Boeing Co key (PROHIBITION) The supplier warned that it was seeking relief from its lenders due to Boeing’s move to substantially reduce parts shipments this year.

As Spirit grapples with the aftermath of Boeing’s 737 MAX production, its chief executive Tom Gentile and other company executives were in Seattle this week to discuss with Boeing about production rates and the possibility of getting more financial help from Boeing, a person familiar with the matter. said.

A Boeing spokesperson declined to confirm or comment on specific conversations between the companies, but said Boeing was “working closely with all of our suppliers to ensure that we all come out of this situation strong, healthy and future-ready.”

Earlier this year, Spirit reached an agreement with Boeing to manufacture 216 ships, as the full set of parts is known, in 2020, but that dropped to 125 ships in May, as the coronavirus crisis spread and several airlines began to defer aircraft deliveries. .

Spirit now expects to deliver only 72 sets of ships to Boeing. That compares to 606 shipments in 2019, Jefferies told customers on Tuesday.

The company has already delivered 37,737 ships to Boeing and expects to produce and deliver the remaining 35 ships for the rest of the year. But Boeing told Spirit not to deliver any more airframes until July, a person familiar with the matter said.

Spirit’s earnings were already under pressure after Boeing halted production of its once-again-sold 737 MAX from January to the end of May, following a safety ban after two fatal crashes.

After the plane was grounded, Boeing maintained production for nine months and earlier this year paid Spirit $ 225 million to support production of the 737 MAX and deferred the repayment of another $ 123 million advance.