Buffett buys into Harley-Davidson, to invest $300 mn
Press Trust of India / New York Feb 04, 2009, 19:36 IST
Once again coming to the rescue of American corporate, billionaire investor Warren Buffett will be buying $300 million worth Harley-Davidson bonds, which will help the bike manufacturer improve its cash position.
Harley-Davidson, well known for high-end motorbikes has been reeling under economic turmoil, which has even forced the entity trim its workforce by 1,100.
Of the total $600 million-worth newly issued bonds, Buffett-led Berkshire Hathaway would buy bonds to the tune of $300 million.
On Tuesday, Harley-Davidson in a statement said it has priced an offering of $600 million of senior unsecured notes as part of its plan "to fund the ongoing motorcycle lending activities of its wholly-owned finance company, Harley-Davidson Financial Services".
According to the statement, the company's largest shareholder -- Davis Selected Advisers, LP and Buffett-led Berkshire Hathaway would be purchasing "equal portions of the aggregate principal amount of the notes".
In return for buying bonds, Harley-Davidson would be paying an interest of 15 per cent on the total investment to Buffett and Davis Selected Advisers.
"The notes will be due in 2014 and will bear interest at a rate of 15 per cent per annum," it said.
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