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Ford Equitizing $10.4 Billion In Debt
The only US automotive company not to be on the taxpayer's payroll, Ford, earlier announced it would pursue a proactive debt for equity and cash exchange in which it would convert up to $10.5 billion of its $25.4 billion in debt at year end. The exchange is in fact a combination of three separate transactions:
- $4.88 billion of 4.25% Convertible notes due 2036 which would receive Ford common stock at a premium, or specifically 108.6957 shares per $1,000 in converts. The result would be incremental dilution of approximately 530.4 million new shares, or roughly 22% of the 2.3 billion shares outstanding.
The full table of non-convertible securities which are eligible for the conversion is presented below. The conversion is a good start on the way to viability however the next and more crucial step is to have people actually purchase cars. And this is where Ford is in a lot of trouble, seeing how even BMW barely managed to sell a whopping 10 of its 7 series sedans in all of February.
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