Ford almighty

2 November 2009 By Antony Currie Follow @AntonyMCurrie

The Motown carmaker followed up its $1bn earnings surprise with a deft bit of balance sheet restructuring. Ford hopes to raise up to $3bn of new capital while also paying back almost as much debt. That should add confidence the firm is properly planning for longterm success.

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Ford reported thirdquarter net earnings of $997m off revenue of $30.9bn. Ford North America posted a pretax profit of $357m, its first quarterly profit since the first quarter of 2005. Ford Europe, Ford South America and Ford Asia Pacific Africa all posted profits, as did Ford Credit.

After the market closed on Monday, Ford also announced that it was taking a number of steps to improve its balance sheet. It is selling a $2bn convertible bond deal and setting up a shelf programme to sell up to $1bn in common stock in the next few months. And the company has also launched an offer to pay back a quarter of the $10.7bn secured revolving loan it drew down earlier and extend the maturity of the remainder from 2011 to 2013 in return for added fees and a one percentage point increase in the interest rate.

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