Ford Motor Co said on Monday that it would sell 300 million common
shares and use part of the proceeds to pay off its healthcare
obligations to the United Auto Workers under the terms of a recently
concluded deal with the union.

Ford also said it expects
to grant to the underwriters -- Citigroup, Goldman Sachs, JPMorgan and
Morgan Stanley -- a 30-day option to buy up to 45 million shares of
common stock.

Ford shares fell 4.6 percent to $5.80 in
after-market trade following the stock offering. At that price, the new
shares would raise about $1.7 billion for Ford.

Ford is the only U.S. automaker that has not sought government aid.

stock offering comes on the heels of a successful debt exchange. Ford
shares have had a four-fold rise in price since hitting a low of $1.50
on February 20.

Ford said net proceeds from the stock offering would also be used for general corporate purposes.

equity offering is another example of the fast, decisive action we are
taking as we build momentum on our plan, including further progress on
improving our balance sheet, Ford Chief Executive Alan Mulally said in
a statement.

Ford is trying to raise capital to fund the
Voluntary Employee Beneficiary Association (VEBA), a union-run fund set
up for retiree healthcare expenses.

Ford restructured payments
into the VEBA, including the option to contribute about half in company
stock, to conserve cash. But the plan to make payments in stock
requires shareholder approval at Ford's annual meeting this week.

which posted a net loss of $1.43 billion in the first quarter, has said
it believes it has adequate liquidity to operate through the economic
downturn without seeking emergency U.S. government loans.