“The transfer of these health care liabilities to the VEBA Trust is the culmination of several years of work and will significantly improve our competitiveness in the U.S.,” Lewis Booth, Ford’s chief financial officer said.
“We have removed a substantial health care liability from our balance sheet and have significantly reduced health care expenses. We also have shown confidence in our liquidity and One Ford plan by pre-paying $500 million of debt owed to the VEBA Trust.”
According to Ford, the following assets have been transferred to VEBA:
- an Amortizing Guaranteed Secured Note maturing June 30, 2022, with an original principal amount of $6.7 billion with a corresponding estimated present value of $4.8 billion
- an Amortizing Guaranteed Secured Note maturing June 30, 2022, with an original principal amount of $6.5 billion with a corresponding estimated present value of $4.7 billion
- warrants expiring on Jan. 1, 2013, to purchase 362 million shares of Ford Common Stock at a price of $9.20 per share
- assets in a Temporary Asset Account consisting of cash and marketable securities with an estimated value of $620 million
- assets in Ford’s internal VEBA trust consisting of cash and marketable securities with an estimated value of $3.5 billion
In all, the new notes will represent about $7 billion in incremental debt on Ford’s balance sheet.
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