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Ford Sells Shares to Raise Cash

By Kevin Spak, Newser Staff

Posted May 12, 2009 7:09 AM CDT

(Newser) – Eager to shore up its cash reserves, stave off bankruptcy, and further distance itself from its struggling rivals, Ford Motor Co. will offer 300 million shares in a public offering this week, the Wall Street Journal reports. Ford thinks the offering will raise investor confidence, bringing in buyers who’ve given up on GM and Chrysler. Priced off of today’s close, the sale could raise between $1.7 billion and $2 billion.

Most of the money will go toward funding its nearly $10 billion health care trust obligations. According to a deal struck with the union, Ford could make half of those payments with stock, but at a stock price no higher than $2.20. After the recent market rally, Ford’s stock has nearly quadrupled in the last 11 weeks, closing yesterday at $6.07, roughly the same level as last summer, before the financial crisis hit.

Unsold 2008 Mustangs sit at a Ford dealership in Castle Rock, Colo., on Sunday, Feb. 22, 2009. (AP Photo/David Zalubowski)

Ford Motor Co. CEO Alan Mulally announces that Ford will invest $550 million to convert its old Michigan Truck Plant into a facility that will build small compact modern cars, Wednesday, May 6, 2009. (AP Photo/Carlos Osorio)

The blue oval logo of Ford Motor Company sits on the crosshatched grille of an unsold 2008 F-150 pickup truck at a Ford dealership in Centennial, Colo. (AP Photo/David Zalubowski, file)

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Automakers Pushing 'Connected' Cars

Gizmos proliferate amid concerns on distracted driving

Ford Recalls 129K Cars: Wheels Might Fall Off

2010-11 Ford Fusions and Mercury Milans affected

Car Sales Jumped 14% Last Month

Chrysler, VW saw huge gains

Groupon to Start IPO Roadshow

Despite questions about its accounting, valuation, and leadership

End of an Era: Last Crown Vic

Final car rolls off Assembly line after 32 years

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Newser By Users

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