Ford Raises $18 Billion in Financing (mortgaging its assets) - NYT [View All]

[Bozita]

http://www.nytimes.com/2006/11/27/business/27cnd-ford.html?hp&ex=1164690000&en=67d5234b124f45f5&ei=5094&partner=homepage

Ford Raises $18 Billion in Financing


By NICK BUNKLEY
Published: November 27, 2006

DEARBORN, Mich., Nov. 27 — For the first time in its 103-year history, the Ford Motor Company is mortgaging its assets, including factories, equipment, office buildings, patents and trademarks, and stakes in subsidiaries like Volvo, in order to raise $18 billion to overhaul itself.

The amount Ford is borrowing exceeds the total market value of all its outstanding stock by more than $2 billion.

Although other auto companies have put up manufacturing equipment and other types of collateral over the years to secure loan, Ford has never done so before. For many decades, its credit was so good that it could easily borrow without pledging assets.

By doing so now, analysts said, Ford is putting its independence at risk. If management fails in its latest attempt to make the ailing company profitable again, Ford may be left with little choice but to find a buyer or merger partner or file for bankruptcy protection.

more...