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Ford Sells Shares to Raise Cash
By Kevin Spak
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Posted May 12, 09 7:09 AM CDT
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(Newser)
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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.