Ford Is Selling Stock

The third-party of the now extinct Detroit Three, Ford Motors, emerged from the dark and has announced it registered a public offering of 300 million shares of its common stock to be sold at a value of $4.75 per share. In addition, the company expects to grant a 30-day option to underwriters to purchase 45 million shares of common stock.

The manufacturer says the money raised after the selling are to be spent "for general corporate purposes". This means that Ford will now fund with cash, instead of stock, part of the payments to be made to the Voluntary Employee Beneficiary Association (VEBA) retiree health care trust.

“We continue to make strong progress on our transformation plan – gaining retail market share with great new products, improving quality, reducing costs and positioning Ford for a return to profitability,” Ford president and CEO Alan Mulally said in a realease.

Ford has filed the registration statement with the Securities and Exchange Commission (SEC). The prospectus of the sale is available at www.sec.gov. Book running managers for the offering are Citi, Goldman, Sachs & Co., J.P. Morgan and Morgan Stanley.

“Today’s equity offering is another example of the fast, decisive action we are taking as we build momentum on our plan, including further progress on improving our balance sheet,” Mulally added.

After the stock offering was made public, Ford shares dropped 4.6 percent, but hopes remain high with the single US automaker not to seek government shelter or aid. Especially since the current offering follows a successful debt exchange, Autonews reported. The market performance of the manufacturer followed the global trend, registering a 31 percent drop in April.