Ford Motor Co.’s need for cash to make mandatory payments scared off investors on Monday, sending shares down more than 9 percent in regular and after-hours trading.
Ford, the only ‘Big 3’ automaker to not receive a government bailout, announced a stock sale today to fund a union healthcare program as part of the company’s efforts to regain profitability.
Several Wall Street banks, which will handle the sale of 300 million shares, have an option to buy an additional 45 million shares within 30 days, Ford said.
Shares fell more than 9 percent in regular trading and after hours trading to $5.70 on the New York Stock Exchange.
“Today's 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,” said Ford chief executive Allan Mulally in a statement.
The funds raised will go to general corporate purposes, including a payment to the Voluntary Employee Beneficiary Association retiree health trust with the United Auto Workers.