Looks like Ford is also issuing shares to raise cash...
Regards,
John
Ford Seeks Cash in a Share Sale
By BLOOMBERG NEWS
Published: May 11, 2009
The Ford Motor Company said it would issue 300 million shares of common stock and use at least some of the money for a union-run medical trust.
Proceeds from the sale, which would raise more than $1.8 billion based on Monday’s closing price, will go to general corporate purposes including the union fund, Ford said in a statement. Ford had 2.8 billion shares outstanding as of May 1, so the new stock would amount to an 11 percent increase.
Ford’s share price of $6.08 on Monday has more than tripled since March 4, when the automaker announced a plan that pared debt by $9.9 billion. G.M. has lost 35 percent of its market value in that time.
By adding cash to the balance sheet, Ford is seeking to forestall a need for a government rescue even if auto sales remain stalled. G.M. is being propped up with $15.4 billion in low-cost loans, and Chrysler is in bankruptcy.
The Ford issue will be priced on Tuesday, according to Bloomberg data. Ford said it expected to grant the underwriters a 30-day option to buy as much as 45 million shares of common stock. Ford said Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley were acting as joint managers of the offering.
By selling shares, Ford can use cash instead of stock to make payments to the Voluntary Employee Beneficiary Association, which will take on the automaker’s future obligations for retiree medical bills. |
