Ford Sells $540 Million of Mazda Stocks

Ford Motor Co., reeling from plunging U.S. car sales & a sinking share price, will raise about $540 million selling part of its stake in Japanese affiliate Mazda Motor Corp. to ease cash concerns, according to Bloomberg.




The automaker will sell 20% of Mazda today, reducing its holdings to 13%, according to a statement. Hiroshima-based Mazda said separately that it will buy back up to a 6.9% stake for as much as 17.9 billion yen ($186 million). The rest of the shares will be purchased by unidentified "strategic business partners."

Ford, which rescued Mazda from bankruptcy 12 years ago, is raising additional funds after burning through $7.7 billion in cash during the third quarter. The Dearborn, Michigan-based automaker, General Motors Corp. and Chrysler LLC are seeking a combined $25 billion in U.S. government loans.

"When the airplane is too heavy and you're losing power, you have to throw out what you can," said Edwin Merner, president of Atlantis Investment Research Corp. in Tokyo, whose parent company manages about $3.1 billion. "It's a desperate, desperate situation."

Ford's U.S. sales plunged 30 percent in October, as the industry heads to the lowest annual tally in 15 years. Ford Chief Executive Officer Alan Mulally, GM's Richard Wagoner and Chrysler's Robert Nardelli are scheduled to testify today at a Senate Banking Committee hearing.

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