Spirit Aero losses deepen, burns cash as Boeing strike bites
Spirit has drawn down $350 mln loan but had only $218 mln cash at end of Q3
Boeing has not paid $425 mln of cash advances to supplier
Spirit has announced worker furloughs to conserve cash
Shares fall 4% in after-hours trading
Recasts, writes through, changes key words for media clients
Oct 23 (Reuters) -Spirit AeroSystems SPR.N posted deeper quarterly losses on Wednesday and said it was burning through dwindling cash reserves, as a strike by Boeing BA.N U.S. factory workers hammered the finances of its biggest supplier.
Spirit said in its third-quarter results that it had drawn down an entire $350 million bridge loan set up when Boeing agreed to acquire the supplier in June, confirming an earlier report from Reuters.
The supplier said it had not received $425 million in cash advances it was expecting from Boeing under a memorandum of understanding signed in April, leaving it with just $218 million in reserves at the end of the third quarter after the loan was drawn.
Spirit shares fell 4% in after-hours trading following the release of its results.
Boeing did not immediately respond to a request for comment about the cash advance. Earlier on Wednesday, Boeing CEO Kelly Ortberg said on an earnings call that there was "no change" to its planned acquisition and integration of Spirit.
Wichita, Kansas-based Spirit said this month it would implement a 21-day furlough for 700 workers as a five-week strike at Boeing eats into the supplier's cash and inventory space.
Boeing suppliers that invested heavily on materials and tooling to support the planemaker's planned ramp-up of jets have been furloughing workers in recent weeks and holding off on investments due to the strike.
Spirit said its furloughs would take effect from Oct. 28 onwards and warned of possible layoffs and additional furloughs if Boeing's strike continued.
Striking Boeing factory workers voted on Wednesday on a new proposed wage deal that could end the work stoppage, although analysts warn that union members may reject the deal.
Spirit posted a net loss of $217 million for the third quarter, compared with $101 million in the same period a year earlier.
Boeing agreed in July to repurchase Spirit, which it had spun off in 2005, for $4.7 billion in stock, while Airbus AIR.PA moved to take on the supplier's loss-making Europe-focused activities. Spirit reiterated on Wednesday that Boeing's acquisition remained on track to close by mid-2025.
Spirit said its backlog at the end of the third quarter stood at $48 billion, including work on commercial aircraft for Boeing and Airbus.
Reporting by Joe Brock in Los Angeles, Allison Lampert in Montreal and Kanjyik Ghosh in Bengaluru; Editing by Alan Barona and Jamie Freed
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