Ford Motor Co., racked by financial problems and a credit downgrade, said Monday its Hertz Corp. car rental unit has filed with the U.S. Securities and Exchange Commission for an initial public offering.
The filing lists a proposed maximum aggregate offering of $100 million, but Ford spokesman Glenn Ray said the eventual amount could be larger or smaller. Ray said the amount was used to calculate the required registration fee for the offering and added that the share price and number of shares to be offered had yet to be determined.
The nation's second-largest automaker said April 20 it was evaluating long-term strategic objectives for Hertz, a wholly owned subsidiary.
Following the IPO, Ford said it plans to divest its remaining ownership in Hertz, which operates the world's largest general use car rental business. Hertz also operates one of North America's largest industrial and construction equipment rental businesses.
JPMorgan Securities Inc., Citigroup Global Markets Inc. and Goldman Sachs & Co. are serving as joint book-running managers for the offering.
In April, Ford Chief Financial Officer Don Leclair said Ford was considering selling Hertz, which it's owned since 1994, in an effort to focus on its core automotive business. Hertz earned $33 million in the first quarter of 2005 versus losing $7 million in the year-ago period. Hertz posted revenue of $8 billion last year.
Ford earned $1.2 billion in the first quarter, but the company has said it's bracing for tougher times ahead because of lower vehicle production, rising health care expenses, decreased demand for some of its profitable trucks and SUVs and other factors.
Last month, Standard & Poor's Ratings Services downgraded Ford's debt, along with No. 1 General Motors Corp., to below investment grade, or junk status.
