Ford Motors Company
(NYSE:F) announced today that it is willing to consider offers for its
Volvo car unit as it looks to raise more cash to fund its
restructuring. The news comes shortly after the automaker completed the
sale of its other luxury international brands that included Aston
Martin, Jaguar and Land Rover. Shareholders are hoping that this
additional cash will be enough to fund the automakers broad
restructuring efforts aimed at returning it to profitability.
Management
is banking on the proceeds from these sales to fund a broad
restructuring effort aimed at reversing a $12 billion annual loss in
2006 by revitalizing its North American operations. The automaker
already received a $26 billion financing package in 2006 which brought
its total available liquidity up to $46 billion; however, many analysts
have suggested that the company may need more to complete its
restructuring efforts - hence the sale of its luxury brands.
Notably,
the Volvo unit was pledged as part of the $26 billion financing
package, so any offer would have to come at a substantial premium in
order to justify surrendering such a large portion of its line of
credit. This, however, did not stop the company from selling its
previous luxury brands - so anything is a possibility.
In the
end, Ford still faces many obstacles before it will be able to return
to profitability. Clearly, any premium prices paid for its brands will
help fund its restructuring and offers a great opportunity to
consolidate its offerings. Combined, these factors make Ford a stock
worth watching!
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