Spirit AeroSystems Enters Advance Payments Agreement with Boeing

On November 8, 2024, Spirit AeroSystems Inc. (Spirit), a subsidiary of Spirit AeroSystems Holdings, Inc., entered into an Advance Payments Agreement with Boeing to address various operational challenges. This agreement aims to tackle higher inventory and contract assets, reduced operational cash flows, lower expected deliveries to Boeing, increased factory costs, and product quality verification enhancements.

According to the terms of the Advance Payments Agreement, Boeing will provide up to $350 million in advance payments to Spirit. These funds are intended for Spirit to utilize in supporting the production and readiness to produce Boeing products at the required contractual rates. The agreement specifies that Boeing’s payment of advances is conditional upon Spirit meeting specified financial reporting requirements and complying with obligations under the agreement.

Spirit is obligated to repay the advances in installments. 25% of the outstanding advances are due on specific dates in 2026, with the remaining balance payable by the end of 2026. An advance fee of 6.0% of the outstanding amount of advances will also be paid by Spirit quarterly until full repayment. Additionally, in case of certain events such as missed repayments or breaches of the agreement’s terms, Boeing may terminate future advances, impose additional fees, and demand immediate repayment.

Until full repayment, Spirit must provide Boeing with financial reports and information and adhere to specified covenants outlined in the agreement. The Advance Payments Agreement will remain in effect until the advances are fully repaid.

This agreement falls under the purview of Item 1.01 of SEC regulations, addressing the entry into a Material Definitive Agreement. It signifies an important financial development for Spirit AeroSystems as it navigates challenges in its operations and production requirements.

The company’s stock (NYSE: SPR) has the potential to be impacted by this agreement with Boeing in the coming months, depending on its effects on Spirit AeroSystems’ financial standing and operational efficiency.

This information was drawn from an 8-K filing submitted by Spirit AeroSystems Holdings, Inc. to the Securities and Exchange Commission (SEC) on November 8, 2024. It sheds light on an important arrangement that Spirit has entered into with Boeing to address critical operational and financial considerations.

**Note:** This news article is based on information disclosed in the 8-K form filed with the SEC and does not include any additional speculative or forward-looking analysis.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Spirit AeroSystems’s 8K filing here.

Spirit AeroSystems Company Profile

Spirit AeroSystems Holdings, Inc engages in the design, engineering, manufacture, and marketing of commercial aerostructures worldwide. It operates through three segments: Commercial, Defense & Space, and Aftermarket. The Commercial segment offers forward, mid, and rear fuselage sections and systems, floor beams, nacelles, struts/pylons, horizontal and vertical stabilizers, flaps and slats flight control surfaces, wing structures, and wing systems.