Ford announced it had reduced its debts by 39 percent or 9.9 billion dollars after what the US automaker called a "successful" restructuring. Wall Street welcomed the news and Ford's shares shot up 9.20 percent.
AFP - US automaker Ford said Monday it had slashed 9.9 billion dollars from a debt pile of 25.8 billion dollars under what it called a "successful" debt restructuring exercise.
The exercise is expected to lower annual interest expense by the company of more than 500 million dollars, Ford Motor Company said in a statement.
"This successful debt restructuring, together with previously announced agreements with the United Auto Workers (union UAW), will substantially strengthen Ford's balance sheet," the company said.
Shares in Ford shot up 9.20 percent to 3.55 dollars in early New York trade.
Unlike its US rivals, the number-two US automaker has not sought government aid to cope with collapsing auto sales as the recession bites.
GM, the largest US automaker, and privately held Chrysler are teetering on the brink of bankruptcy despite a multibillion-dollar government rescue.
Last week President Barack Obama's administration warned that neither had met strict conditions laid out in a 17.4-billion-dollar government bailout agreed late last year.
The two companies are now seeking an additional 21.6 billion dollars in public aid, which the government says will only be forthcoming if they submit more realistic plans for their survival.
"By substantially reducing our debt, Ford is taking another step toward creating an exciting, viable enterprise," said Ford president and chief executive Alan Mulally.
"As with our recent agreements with the UAW, Ford continues to lead the industry in taking the decisive actions necessary to weather the current downturn and deliver long-term profitable growth."
Modest signs of hope emerged last week for the troubled US auto industry, as March sales plummeted from a year ago but showed a substantial uptick compared with February.
Overall sales of new vehicles fell 37 percent from a year ago but were up 24.5 percent from February levels, according to market research firm Autodata.
Ford said its March US sales slumped 40.9 percent from the same month a year ago, but rebounded 30 percent from February levels.
Date created : 2009-04-06