Carmaker Ford cuts debt by $9.9bn

The US carmaker Ford has seen its shares rise 16% in New York, after saying it had cut $9.9bn (�6.7bn) from its $25.8bn debt.

The 38% debt reduction will reduce Ford's interest payments by more than $500m a year.

It said the move, along with previous agreements with the United Auto Workers (UAW) union, would "substantially strengthen Ford's balance sheet".

Shares in the firm closed 52 cents higher at $3.77.

'Strong positive'

"As with our recent agreements with the UAW, Ford continues to lead the industry in taking the decisive actions necessary to weather the current downturn and deliver long-term profitable growth," said Ford chief executive Alan Mulally in a statement.

Ford is the only one of the big three US carmakers that has not taken government bail-out money to enable it to continue operating.

"Clearly it is a strong positive for the company, the ability to reduce liabilities and the interest burden," Fitch Ratings managing director Mark Oline said.

"At this point the interest of the bondholders and equity holders are pretty much aligned. Both want Ford to survive the current environment."

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