Ford Motor Co detailed debt restructuring initiatives on Wednesday, including conversion of debt to equity and two cash tender offers, that could retire up to $10.4 billion of the automaker's debt.
The No. 2 U.S.-based automaker had $25.8 billion of automotive debt as of the end 2008.
Ford has the potential to restructure up to $10.4 billion of debt, given the cash available and the prices, the company said.
The automaker's announcement is the latest step Ford has taken to bolster its finances in the face of the global economic downturn and to maintain funding to complete a turnaround plan without seeking emergency U.S. government loans.
Ford -- the only U.S. automaker to not seek U.S. government aid -- had earlier reached an agreement with the United Auto Workers union on contract changes to reduce its labor costs.
The UAW had also agreed to accept up to half of required payments to a union retiree healthcare trust in stock, providing Ford with additional liquidity.
The UAW agreement is contingent on Ford pursuing restructuring action with other stakeholders, including debt reduction.
Ford said it will pay a premium in cash to persuade holders of its 4.25 percent senior convertible notes due December 15, 2036, to convert to Ford's common stock.
Also, Ford's finance arm began a separate $1.3 billion cash tender offer for the automaker's unsecured, non-convertible debt securities, and another $500 million cash tender offer for Ford's senior secured term loan debt.
Ford also announced its intent to exercise its right to defer future dividend payments on the 6.50 percent cumulative trust preferred securities of Ford Motor Company capital trust II beginning in April.
(Reporting by Poornima Gupta)