Company: SPR
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001628280-25-009088
Chunk: 157

Company: Spirit AeroSystems Holdings, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 7
Chunk 157
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 Financing

As described in the Form 8-K filed by us on November 12, 2024, on November 8, 2024, we entered into an advance payments agreement with Boeing to provide up to $350.0 million of cash advances for the sole purpose of producing and maintaining readiness to produce products as defined in existing contracts at the rates required by Boeing. These advances were intended to address Spirit’s higher levels of inventory and contract assets, lower operational cash flows, decrease in expected deliveries to Boeing and higher factory costs to maintain rate readiness, attributed to product quality verification process enhancements (including moving such process from Renton, Washington, to Wichita, Kansas), the lingering effects of the recent strike by Boeing employees and limitations on Boeing increasing production rates. As of December 31, 2024, we had borrowed $200.0 million under this advance agreement.

The advance agreement requires Spirit to repay the advances to Boeing in accordance with the following payment schedule: 25% of the then-outstanding advances on each of April 30, 2026, June 30, 2026, and September 30, 2026, and the remaining balance of outstanding advances on December 31, 2026. The advances will bear an advance fee in an amount equal to 6.0% of the outstanding amount of the advances which will be paid on the fifteenth day of each calendar quarter, by capitalizing such fee and adding it to the outstanding amount of Advances thereunder.

As described in the Form 8-K filed by us on April 23, 2024, on April 18, 2024, we entered into the MOA with Boeing to provide $425.0 million of cash advances, based upon our maintaining a production rate that supports Boeing’s production demand in accordance with certain long-term supply agreements, all of which was received in the second quarter of 2024. Additionally, this MOA was amended on June 20, 2024 to provide an additional $40.0 million of cash advance which was received in the second quarter. The MOA was amended again on January 22, 2025 to reschedule the repayment dates and add additional provisions regarding an event of termination of the Merger Agreement.

Per the terms of the January 2025 amended MOA, repayments will be a total of $75.0 million on April 1, 2026, $75.0 million on May 1, 2026, $75.0 million on June