Ford payments will cut debt by $4 billion, to $27 billion
Ford Motor Co. said today that it will reduce its current debt load by about $4 billion.
The company will pay $3.8 billion owed to the UAW Retiree Medical Benefits Trust ahead of schedule, Ford said in a statement. The automaker also will pay $255 million in dividends on preferred securities starting July 15. Ford had deferred those quarterly distributions as it struggled to get back to profitability.
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Source: Ford payments will cut debt by $4 billion, to $27 billion
The company will pay $3.8 billion owed to the UAW Retiree Medical Benefits Trust ahead of schedule, Ford said in a statement. The automaker also will pay $255 million in dividends on preferred securities starting July 15. Ford had deferred those quarterly distributions as it struggled to get back to profitability.
Quote from the article:
At the end of the first quarter, Ford owed about $34 billion in automotive debt as the result of $23 billion in loans the company took out in 2006 to fund its turnaround. Today's payment will reduce the debt owed to about $27 billion. Ford defied the expectations of analysts who had said the automaker would pay a portion of its obligation in stock because the second-largest U.S. automaker's shares have been trading down since closing at a 52-week high of $14.46 on April 26. “We expect to continue to improve our balance sheet as we deliver on our plan,” CEO Alan Mulally said in a statement. “Importantly, our business results make it possible to take these actions while still accelerating the investments we are making in our business to serve our customers with the very best cars and trucks.” Ford said it has reduced its debts by more than $7 billion during the second quarter. “The total debt reduction will save Ford more than $470 million in annual interest expense,” the statement said. |
Source: Ford payments will cut debt by $4 billion, to $27 billion
