Ford to buy back up to 116 million shares to offset dilution

Article by Andrew Christian, on May 9, 2014

Ford Motor Co. has disclosed a $1.8-billion stock repurchase program that covers up to 116 million shares to offset possible share dilution and to position the company to cut its automotive debt by $883 million At the of the first quarter of 2014, Ford had around $15.7 billion in automotive debt. It has disclosed plans cut the figure to around $10 billion by mid-decade.

A repurchase of 103 million shares will counter dilutive effect of potential conversions of Ford’s 4.25 percent senior convertible notes that are due November 15, 2016. With the closing stock price of $15.46 per share on May 7, 2014, those 103 million shares would have a value of around $1.6 billion.

Another repurchase of 12.6 million shares will offset the dilutive effect of share-based incentive pay for around 26,000 salaried employees for 2014 – amounting to almost $195 million at Wednesday's closing stock price.

Ford CFO Bob Shanks remarked that two repurchase moves will reduce the carmaker’s diluted shares by around 3 percent.

Ford can terminate the noteholders' conversion rights starting November 20, 2014, and the carmaker has the right to settle conversions with shares, cash or both. The repurchase program will also offset dilutive effect of shares Ford will issue to settle those conversions.

Topics: ford, shares

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Mercedes-Benz Vans, one of the world’s top van makers, has just launched adVANce, which is their strategic transport industry initiative for the future. With this, the division analytically considers its...
by - September 29, 2016
In 2007, when Nissan first introduced the R35 Nissan GT-R at the 2007 Los Angeles Auto Show, the car carried with intense power and a price tag of $78,000. Up...
by - September 29, 2016
Bentley Motors has just released the specs of the new Bentayga Diesel. Obviously, we couldn’t wait to share it here since it’s the first ever diesel model to come out...
by - September 26, 2016
A big chunk of Volvo Cars’ legacy in developing the most durable and capable car is evident in its latest Cross Country collection. Suffice it to say, our planet has...
by - September 21, 2016
Just very recently, we were all delighted to finally see a Bugatti Chiron out in the streets casually hanging around Cannes in France. The said car was purchased by a...
by - September 9, 2016