Ford to issue debt securities after virus triggers $2 billion loss

(Reuters) - Ford Motor Co said on Friday it would tap debt markets to shore up its cash reserves as the coronavirus outbreak pummeled vehicles sales and halted production, resulting in an estimated loss of about $2 billion for the first quarter. The Dearborn, Michigan-based company, which lost its investment grade status in March, said it has filed for a three-part unsecured debt offering, but did not disclose the amount. Ford, which has drawn down over $15 billion to ride out the damage to its business from the pandemic, said it had to put up certain assets as security for the loans because it does not maintain an investment grade status

Reuters April 18, 2020 00:06:15 IST
Ford to issue debt securities after virus triggers $2 billion loss

Ford to issue debt securities after virus triggers 2 billion loss

(Reuters) - Ford Motor Co said on Friday it would tap debt markets to shore up its cash reserves as the coronavirus outbreak pummeled vehicles sales and halted production, resulting in an estimated loss of about $2 billion for the first quarter.

The Dearborn, Michigan-based company, which lost its investment grade status in March, said it has filed for a three-part unsecured debt offering, but did not disclose the amount.

Ford, which has drawn down over $15 billion to ride out the damage to its business from the pandemic, said it had to put up certain assets as security for the loans because it does not maintain an investment grade status. It has suspended dividend for the quarter.

The No.2 U.S. automaker had about $70 billion of assets as of Dec. 31, and about $30 billion in cash on its balance sheet, as of April 9.

Separately, Ford warned that its production of high-priced versions of pickups and sport utility vehicles could be hurt due to the damage caused by a tornado earlier this week at parts supplier BorgWarner's South Carolina factory.

BorgWarner's facility makes transfer case for Ford's vehicles.

Ford's vehicle sales to dealers fell 21% in the first quarter, compared with a year earlier.

In March, the company shuttered plants in North America and Europe due to the COVID-19 outbreak.

Only Ford's joint ventures in China, where the pandemic has been receding, are currently producing vehicles and dealers there have resumed work.

Ford's U.S. sales dropped 12.5% in the first quarter. The market, with its highly profitable pickup truck and SUV segments, generates the overwhelming majority of Ford's profits.

(Reporting by Rachit Vats and Ankit Ajmera in Bengaluru; Editing by Aditya Soni and Shinjini Ganguli)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.