Family-controlled Ford Motor Co has announced it is reducing its debt by more than $4 billion in order to further strengthen its balance sheet.
The US-based business, the only US automaker not to receive state aid to stave of bankruptcy during the financial crisis, is retiring debt owed to the UAW Retiree Medical Benefits Trust, whose members count on the Trust for their health care benefits, ahead of schedule.
The company said it remains on track to deliver solid profits and positive automotive operating-related cash flow this year. Combined with an April payment of $3 billion on its 2013 revolving credit facility, Ford will have reduced its debt by more than $7 billion in the second quarter.
Ford's non-family president and CEO Alan Mulally said: "We are increasingly confident about the future. Importantly, our business results make it possible to take these actions while still accelerating the investments we are making in our business to serve our customers with the very best cars and trucks.
The second quarter debt reductions are in addition to a series of actions Ford has taken since early 2009 to improve its balance sheet. These include completing transactions in spring 2009 that reduced Ford's Automotive debt obligations by $10.1 billion, and raising more than $5.7 billion since the second quarter of 2009 through several equity and equity-linked offerings.
In May, the Ford family retained their multiple voting shares through which they control the business at the company's annual shareholder meeting. (Continue reading here)
Want to get the latest family business/family office news direct to your desktop? Click here to register to receive our weekly newsletter
Are you a member of a multigenerational family business or family office? Click here to subscribe to our magazines