Ford Finalizes Financing Package
The Associated Press
Friday, December 15, 2006; 11:08 AM
DEARBORN, Mich. -- Ford Motor Co. finalized a $23.4 billion financing package on Friday to fuel its restructuring and cover expected losses in its automotive operations during the next two years.
Ford, under pressure from rising costs and competition, expects to burn through $17 billion in cash from 2007 to 2009. The automaker lost $7 billion during the first nine months of the year and has said it does not expect to return to profitability until 2009.
Ford said in a filing with the U.S. Securities and Exchange Commission that the financing included a $7 billion term loan, $4.95 billion in convertible notes and a credit line of nearly $11.5 billion.
Ford said last month that it would get about $18 billion in financing, using its domestic plants and other automotive assets as collateral, to protect itself against a recession or other unanticipated events. The No. 2 U.S. automaker last week raised its new borrowing capacity to as much as $23 billion.
It marked the first time the company has used assets such as plants to secure financing.
About 38,000 of the company's hourly workers have signed up for buyouts and early retirement packages as part of its "Way Forward" restructuring plan that includes plans to shutter 16 plants.
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