Ford to sell 20% stake in Mazda

Tokyo - Embattled US automaker Ford will sell a 20% stake in Japan's Mazda to raise badly needed cash, a report said on Tuesday.

The shares are expected to be bought by a group of trading houses and insurance firms, as well as auto parts supplier Denso, the Nikkei business daily reported without naming its sources.

It said Mazda, Japan's fifth largest automaker, may also buy some of the shares being sold by Ford, which is currently the largest shareholder in the Japanese automaker with a 33.4% stake.

A 20% stake was worth about ¥50bn based on Tuesday's share price, the newspaper said.

Mazda spokesperson Toyota Tanaka said he was unable to confirm the report.

Ford invested in Mazda for the first time in 1979 and raised its stake to 33.4% 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.

But in a turnaround of fortunes, Ford lost $129m in the third quarter of this year, and is on course to cut 10% of its jobs.

The US automaker is desperately seeking government aid to shore up its finances.

Democrats in the US Congress are pushing to use part of a $700bn 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 said on Monday it had sold its 3% stake in Japanese mini-car specialist Suzuki for about $230m.

- AFP