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Ford Motor Co said on Friday it would tap debt markets to shore up its cash reserves as the coronavirus outbreak pummeled vehicles sales and halted production, resulting in an estimated loss of about $2 billion for the first quarter.
Earlier this week, Ford had predicted a first-quarter loss of $600 million.
The Dearborn, Michigan-based company, which lost its investment grade status in March, said it has filed for a three-part unsecured debt offering, but did not disclose the amount.
Ford, which has drawn down over $15 billion to ride out the damage to its business from the pandemic, said it had to put up certain assets as security for the loans because it does not maintain an investment grade status. It has suspended dividend for the quarter.
The No.2 U.S. automaker had about $70 billion of assets as of Dec. 31, and about $30 billion in cash on its balance sheet, as of April 9.
Separately, Ford warned that its production of high-priced, high-profit versions of pickups and sport utility vehicles could be hurt due to the damage caused by a tornado earlier this week at parts supplier BorgWarner’s South Carolina factory.
BorgWarner’s facility makes transfer cases for Ford’s vehicles.
Ford’s vehicle sales to dealers fell 21% in the first quarter, compared with a year earlier.
In March, the company shuttered plants in North America and Europe due to the COVID-19 outbreak.
Only Ford’s joint ventures in China, where the pandemic has been receding, are currently producing vehicles and dealers there have resumed work.
Ford’s U.S. sales dropped 12.5% in the first quarter. The market, with its highly profitable pickup truck and SUV segments, generates the overwhelming majority of Ford’s profits.