Ford puts entire company on the line in hopes of a turnaround
Quote selected text Published November 29th, 2006 in NASCAR News
Ford Motor Co. is going all in on a bet-the-company financing strategy that will put virtually all of its U.S. assets — including factories, office buildings and technology — up as collateral in a multibillion-dollar credit deal designed to buy time to execute a North American restructuring.
The struggling automaker hopes to obtain $18 billion in financing to fund its turnaround and shore up its liquidity as protection against unanticipated events, such as a recession, the company said in a statement Monday.
The financing will include up to $15 billion in secured loans, which will be backed by most of Ford’s domestic assets, as well as all or part of the stock it owns in subsidiaries such as Ford Motor Credit Co. and Volvo.
This is the first time Ford has put its assets up as collateral. Doing so gives it access to much-needed funding, but also translates into a big increase in debt-servicing costs. More critically, the company’s future is on the line if it fails to execute a turnaround.
“This is Ford’s one last shot to get it right,” said Wall Street analyst John Casesa of the Casesa Shapiro Group LLC. “If the restructuring plan is not executed flawlessly, the company will lose its independence. Management is staking the entire future of the company on successfully executing this plan.”
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its days like this that make you wanna cry
Every dog has its day…
This is bigger news than people think. Ford has been struggling for years now but to put up the company as collateral is scary. If Ford goes under it would be a big blow to the economy.
who cares? chevy rules
who cares? chevy rules