Page last updated at 07:05 GMT, Wednesday, 13 May 2009 08:05 UK

Ford tumbles on share issue news

Ford vehicles at a Michigan plant
Ford has been gaining market share despite its recent problems

Shares in Ford have fallen almost 18% after the carmaker announced plans to issue 300 million common shares to fund healthcare for retired workers.

The new shares will be sold at a price of $4.75 each. The existing shares closed down $1.07 at $5.01.

The share issue is set to raise $1.4bn (£914m). Ford must make a $1.2bn cash payment to its Voluntary Employee Beneficiary Association by 31 December.

Ford is the only major US carmaker that has not accepted government aid.

It will be the first public share offering at Ford since the carmaker became a publicly traded company in 1956.

Chief executive Alan Mulally said selling the stock was "another key step in our plan to transform Ford into an exciting, viable enterprise poised to return to profitability".

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