Ford plans sale of 300 million shares to fund heath care trust

May 12, 2009

(ChattahBox) — Ford Motor Co, the only U.S. automaker that has not sought government aid said on Monday after the market closed that it would sell 300 million common shares.

The company said part of the proceeds from the offering would be used to fund its healthcare obligations to the United Auto Workers under the terms of a recently concluded deal with the union.
Ford shares fell about 5%, from Monday’s closing price of $6.08 to about $5.80 a share, in after-hours trading. At that price, the new shares would raise about $1.7 billion for Ford.

With about 2.9 billion shares outstanding, a 300-million-share offering would dilute current investors’ holdings by about 10%.

Ford’s stock offering comes on the heels of a successful debt exchange. Ford shares have had a four-fold rise in price since hitting a low of $1.50 on February 20.

Ford, which posted a net loss of $1.43 billion in the first quarter, said net proceeds from the stock offering would also be used for general corporate purposes.


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