By Shawn Langlois
SAN FRANCISCO (Dow Jones) - Ford Motor Co. shares rose as much
as 22% early Monday after the automaker said it slashed its debt by
$9.9 billion in its bid to push through the epic industry downturn
without help from U.S. taxpayers.
At last check, Ford (F) stock was up 54 cents at $3.79 and has
now risen 66% since the beginning of the year.
In the past year, however, the shares are still down 44%.
Ford and its Ford Credit financing arm will use $2.4 billion in
cash plus 468 million shares of common stock to reduce outstanding
debt, which stood at $25.8 billion at the end of the year.
The moves will also cut Ford's annual interest expense by $500
million.
The Dearborn, Mich.-based company, which has been bleeding
billions of dollars in cash each quarter, said the debt
restructuring along with previously announced deals with the United
Auto Workers union will "substantially strengthen" its balance
sheet.
"Ford is taking another step toward creating an exciting, viable
enterprise," Ford CEO Alan Mulally said in a statement.
Rival General Motors Corp. (GM) is also trying to cut its debt
in an attempt to justify further funding from the Obama
administration. The ailing Detroit automaker has until June 1 to
come up with a better restructuring plan than the one handed in
last month.
GM shares followed Ford into the green, up almost 8% to $2.26
even as the broader market moved lower.