Ford deal expensive for Kerkorian so far

LAS VEGAS, Oct. 17 (UPI) -- Billionaire Kirk Kerkorian has put up 50 million more shares of his Las Vegas casino MGM Mirage to back a major purchase in Ford Motor Co., records show.

Kerkorian's Tracinda Corp. expanded its holdings in Ford this summer to 6.43 percent of the troubled company, purchasing 140 million shares.

Ford's stock has fallen from $8.50 per share when Tracinda completed a 20 million share tender offer in June to a current price of about $2.27 a share, the Detroit News reported Friday.

So far, Kerkorian has lost about $675 million on the investment. But, shares of MGM Mirage have also plummeted, causing the collateral he used for a $600 million Bank of America line of credit in the Ford purchase to fall in value.

This year, MGM Mirage shares have fallen from $81.60 a share to about $14.40 a share, the News reported.

A Securities and Exchange filing said Kerkorian had pledged the additional collateral, the News reported.

"He had to put up additional capital for his existing Ford shares," Burnham Securities Inc. analyst David Healy said. "He was anticipating the margin call by putting up more shares as collateral."