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US: Billion dollar debt reduction to see Ford net cash positive by year end

By just-auto.com editorial team | 25 November 2010

Ford has today (25 November) announced the results of conversion offers that will reduce the company's outstanding automotive debt by more than US$1.9bn and lower its annualised interest costs by around US$180m.

Including the conversion offers, the recent US$3.6bn prepayment on VEBA Note B and net debt reductions over the first nine months, Ford has reduced its automotive debt by US$12.8bn this year, lowering its annualised interest costs by nearly US$1bn.

Ford expects to be net cash positive by the end of 2010.

"These successful conversion offers represent another significant step toward our goal of reducing our automotive debt and improving our balance sheet," said Ford EVP and chief financial officer Lewis Booth.

"We had previously said that even without the conversion offers, we expected our automotive cash to be about equal to automotive debt by the end of this year, well ahead of our earlier expectations.  With the conversion offers, we will be clearly net cash positive by year-end 2010."