Ford to sell 20% stake in Mazda
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Hit hard by the financial crisis, US carmaker Ford has announced that it will sell a 20% stake in Japanese group Mazda for 540 million dollars, in order to raise cash. Ford thereby reduces its stake from 33.4% to around 13%.
Embattled US automaker Ford Motor Co. said Tuesday it would sell a 20-percent stake in its Japanese partner Mazda Motor Corp. for 540 million dollars to raise cash.
Ford said it would continue a strategic alliance with Japan's fifth largest automaker after reducing its stake from 33.4 percent to about 13 percent.
"This agreement allows Ford to raise capital that will help fund our product-led transformation," Ford chief executive Alan Mulally said.
Ford said it would remain Mazda's largest shareholder and keep a seat on the Japanese automaker's board of directors.
Mazda for its part said it would spend up to 17.9 billion yen (185 million dollars) to buy back 6.87 percent of its shares on the market. Several unnamed business partners will also buy Mazda shares sold by Ford.
The partners include a group of trading houses and insurance firms, as well as auto parts supplier Denso Corp., the Nikkei business daily reported.
Ford invested in Mazda for the first time in 1979 and raised its stake to 33.4 percent in 1996 when the Japanese carmaker's business slumped.
The two companies have since profited from the joint development of compact cars with Mazda recovering its financial health.
"We will continue our strategic relationship through our ongoing joint ventures with Ford, as well as the sharing of platforms and powertrains," said Mazda chief executive Hisakazu Imaki.
Ford lost 129 million dollars in the third quarter of this year, and is desperately seeking government aid to shore up its finances.
Democrats in the US Congress are pushing to use part of a 700-billion-dollar Wall Street package to help the ailing auto industry, but the White House has warned against draining funds from the financial sector bailout.
Ford's cash-strapped US rival General Motors Corp. said Monday it had sold its three percent stake in Japanese mini-car specialist Suzuki Motor Corp. for about 230 million dollars.
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