Boeing (BA) - Get The Boeing Company Report supplier Impresa Aerospace, which makes parts involved in the manufacture of the company’s grounded 737 MAX jets, has filed for bankruptcy protection as Boeing continues to struggle both with getting the planes back in the air and the coronavirus pandemic.
Impresa Aerospace filed for bankruptcy protection in the U.S. Bankruptcy Court in Wilmington, Del., amid a steep loss in revenue due to the global grounding of the 737 MAX aircraft following two fatal crashes that killed a total of 346 people.
Private-equity firm Twin Haven Capital Partners, Impresa’s majority owner and secured lender, plans to buy the Gardena, Calif.-based company out of bankruptcy for $10 million, unless a better offer is made, according to court papers.
The bankruptcy is the latest sign of the struggles afflicting Boeing and the aerospace industry, and how the 737 MAX's grounding and the ongoing pandemic has slammed the airline industry's demand for planes - and how that is reverberating through the entire aerospace supply chain.
The 737 MAX in particular has been a big source of Boeing's woes. A damning 245-page report released earlier this month by the House Transportation and Infrastructure Committee pointed to a "horrific culmination" of missteps including a lack of transparency on the part of Boeing management and “grossly insufficient” oversight by the Federal Aviation Administration for the two fatal 737 MAX crashes.
Another big source of Boeing's woes: the slammed airline industry, which continues to reel from the pandemic and steep drop in air travel. Executives of the country's biggest airlines were at the White House last week asking President Donald Trump for an additional $25 billion in aid to get them through the pandemic and avoid layoffs.
Meantime, the U.S. Department of Defense on Thursday awarded Boeing a seven-year, $2.24 billion contract from the U.S. Air Force to produce small diameter bombs for the Department of Defense and seven foreign military sales customers.
Boeing will supply so-called SDB Increment I munition, along with containers and carriages, and will receive $247.5 million at the time of award. Netherlands, Norway, Belgium, Japan, Israel, Korea and Australia are all procuring the guided bombs.
Shares of Boeing were up 2.44% at $149.56 in trading on Friday.