Auto news 11/27
November 28th 2006 03:49
[B]Ford puts U.S. holdings up for collateral[/B
Ford Motor Co. on Monday said it will put all of its U.S. holdings up as collateral for a financing deal designed to keep the company afloat.
Ford hopes to get $18 billion in new financing “in order to address near-and medium-term negative operating-related cash flow, to fund its restructuring, and to provide added liquidity to protect against a recession or other unanticipated events,” Ford said in a statement Monday.
It will include up to $15 billion in secured loans backed by Ford’s domestic assets and stocks, including factories and intellectual property, it owns in subsidiaries such as Ford Credit and Volvo. Ford has struggled with a massive restructuring, plant closings and increasing costs.
Ford is also seeking $3 billion in new unsecured notes. The unsecured portion of the financing deal is being funded by Citigroup Corporate and Investment Banking, Goldman Sachs Credit Partners L.P., and J.P. Morgan Securities Inc.
The deal could close by Dec. 31.
It is the first time the company has used assets such as plants to secure financing.
Ford lost $7 billion during the first nine months of the year and doesn’t expect to turn a profit until 2009.
It has offered retirement packages to 75,000 U.S. factory workers and plans to close 16 plants.
Ford Motor Co. on Monday said it will put all of its U.S. holdings up as collateral for a financing deal designed to keep the company afloat.
Ford hopes to get $18 billion in new financing “in order to address near-and medium-term negative operating-related cash flow, to fund its restructuring, and to provide added liquidity to protect against a recession or other unanticipated events,” Ford said in a statement Monday.
It will include up to $15 billion in secured loans backed by Ford’s domestic assets and stocks, including factories and intellectual property, it owns in subsidiaries such as Ford Credit and Volvo. Ford has struggled with a massive restructuring, plant closings and increasing costs.
Ford is also seeking $3 billion in new unsecured notes. The unsecured portion of the financing deal is being funded by Citigroup Corporate and Investment Banking, Goldman Sachs Credit Partners L.P., and J.P. Morgan Securities Inc.
The deal could close by Dec. 31.
It is the first time the company has used assets such as plants to secure financing.
Ford lost $7 billion during the first nine months of the year and doesn’t expect to turn a profit until 2009.
It has offered retirement packages to 75,000 U.S. factory workers and plans to close 16 plants.
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