Ford reduces its debt by $1.9B Ford Motor Co. announced Wednesday that it expects to end the year with more cash than debt after converting $1.9 billion in debt to new common stock that will be issued at month's end.
The last time this situation occurred was the second quarter of 2008.
Debt reduction is crucial for the company that avoided following General Motor Co. and Chrysler Group LLC into bankruptcy, where those carmakers shed most of their debt. Ford mortgaged everything the company had, including its Blue Oval trademark, to restructure itself and has made cleaning up its balance sheet a priority.
Ford has reduced automotive debt $12.8 billion this year, down to about $21billion from the $34 billion it held at the end of 2009. Ford also has lowered its total annual interest costs nearly $1 billion. Debt conversions cut interest costs about $180 million.
"These successful conversion offers represent another significant step toward our goal of reducing our automotive debt and improving our balance sheet," said Chief Financial Officer Lewis Booth.
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