Jim Farley in 2017.
Luke Macgregor | Bloomberg | Getty Images
DETROIT – Ford Motor plans to raise nearly $ 2 billion through a five-year convertible ticket offering, the company announced Tuesday.
The carmaker intends to use the net proceeds of the sale for general corporate purposes, including the ability to repay the debt. Ford had $ 24 billion in debt to finish last year, excluding its financial arm.
The tickets will be sold through a private offer to qualified institutional buyers, pending in 2026. Ford says the full starting amount will be returned in cash, while the remaining amount will also be paid in cash, stock shares or a combination of both, according to the company.
Convertible bonds are debts that can be converted into a certain number of shares, while offering the benefits of a bond, such as interest payments, but traditionally at low rates.
Ford expects to grant initial ticket buyers a 13-day option to purchase up to an additional $ 300 million in additional aggregate tickets, exclusively to cover surpluses, if any.
Ford shares have risen 50% so far this year to $ 13.20, in anticipation of accelerating its vehicle electrification efforts with CEO Jim Farley taking the helm at in October. Currently, the company’s market cap stands at $ 51.6 billion.