Ford plans to cut debt by $3B Ford Motor Co. today announced plans to reduce debt by another $3 billion with an offer for investors to convert some debt to equity by March 15.
The move is part of Ford's continuing efforts to reduce debt and the action lowers its debt level to $16.1 billion from $19.1 billion at the end of 2010.
The automaker would not say whether further efforts to reduce debt would be taken this quarter. Cleaning up its balance sheet, however, remains a priority for the year in efforts to return to investment grade status.
Ford will take a $60 million charge in the first quarter as a result of this action.
The company had $20.5 billion in cash at the end of the year. Lopping off $3 billion in debt will result in a savings of $190 million in interest.
"We remain focused on reducing our automotive debt as the core automotive business continues to strengthen," said Lewis Booth, Ford executive vice president and chief financial officer. "We are pleased with the progress we have made, and we are committed to continuing to improve our balance sheet to lay a solid foundation for a strong and profitably growing business in years to come."
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