Ford Motor Company, the US parent of Ford Australia, has raised US$1.4 billion through a 300 million share offer for US$4.75 per share; a move that its chief executive said was an important step toward getting profitable again.
Ford said the proceeds would be used for general corporate purposes, including funding a portion of its obligation to a union-run fund set up for retiree healthcare expenses.
Selling the stock “is another key step in our plan to transform Ford into an exciting, viable enterprise poised to return to profitability,” Chief Executive Office Alan Mulally said in a statement.
Issuing equity now and possibly funding a larger portion of its retiree obligations with cash would help Ford improve its balance sheet and reduce the potential impact of those obligations on its shareholders, Mr Mulally said.
Ford is the only US automaker that has not sought government aid.
Reuters Newsagency says the news came as other US carmakers were dealing with tough times.
General Motors Corp shares have hit their lowest level since the Great Depression and Nissan Motor Co posted a loss and expected more because of the deep global auto downturn.
GM is less than three weeks from a June 1 deadline to reach agreement with its stakeholders to avoid a bankruptcy filing.
The downturn late last month forced Chrysler to seek bankruptcy protection, and has threatened the survival of numerous auto parts suppliers as well.