NEW YORK (AFP) – Billionaire US investor Kirk Kerkorian announced via his holding company Tracinda on Tuesday that he had begun selling shares in car group Ford and was considering divesting his whole stake.
Billionaire investor Kirk Kerkorian, seen here in 2003, announced via his holding company Tracinda on Tuesday that he had begun selling shares in struggling car group Ford and planned to divest his whole stake
In a sharp change of strategy, Tracinda said it had sold 7.3 million shares in Ford for an average price of 2.43 dollars per share -- representing a huge loss for the 91-year-old investor and a further blow for the struggling group.
Tracinda said it also "intends to further reduce its holdings of Ford common stock, including the possible sale of all of its remaining 133,500,000 shares" which amount to a 6.09 percent stake.
It said it had contacted an investment bank about further divestments, adding that it would now focus on the gaming, hospitality and oil and gas industries where it sees "unique value."
In two major operations announced in April and June, Tracinda built a position in Ford, paying 8.50 dollars a share.
Kerkorian, who made a fortune from running and selling Las Vegas casinos, bought the shares in Ford after referring at the time to "meaningful traction in its turnaround efforts."
He pointed to encouraging first-quarter results from Ford, which showed a profit of 100 million dollars in a surprise turnaround after heavy losses.
At the time, Ford officials said they were on track to achieve profitability in 2009 -- an objective that has now been shelved.
Since then, the Detroit giant has struggled to sell its heavy vehicles in its domestic market as consumers struggle with rocketing fuel prices and recent financial turmoil has also hit sales.
For the second quarter, Ford announced its worst loss ever of 8.7 billion dollars due to hefty charges related to write-downs on the value of its assets and losses from auto leasing.
In a recent announcement, Ford said sales in the US fell 34 percent to 116,734 vehicles in September while year-to-date sales were down 17.3 percent at 1.5 million vehicles.
Shares in the group fell 4.28 percent to 2.23 dollars in late morning trading on Tuesday.
Ford also risks being left out of expected consolidation in the US auto industry if its two US rivals, General Motors and Chrysler, clinch a merger deal as several press reports have recently suggested.
Sources familiar with the situation told AFP last week that discussions between GM and Chrysler were underway.
Kerkorian, who has a reputation as an investor who turns around troubled companies, has a long but mixed history in the automobile industry, often failing to achieve his ambitions.
He was at one point Chrysler's biggest shareholder and launched his own bid for the auto giant before backing the deal to sell the firm to Germany's Daimler-Benz.
Years later, Kerkorian filed suit, saying false statements were made about a "merger of equals" of Chrysler and Daimler, and claimed the German firm had diminished his share value. But his suit failed.
In 2006, Kerkorian boosted his stake in General Motors, the largest US automaker, and won a board seat for one of his associates, but later reduced his holdings after failing to engineer an alliance with Nissan-Renault.
Kerkorian announced another bid for Chrysler in 2007 before the announcement of the sale of the US division to private equity firm Cerberus.
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