Ford to sell 20% Mazda stake to raise cash

Ford Motor is slashing its stake in Japan's Mazda Motor Corporation by nearly two-thirds, joining other struggling US automakers in selling prized assets to stay afloat.

Ford, which owns 33.4 per cent of Mazda, will sell about a 20 per cent stake, the companies said in a separate statements.

The sale would net Ford some $540 million based on the closing price of Mazda's shares Tuesday. The shares rose 6.4 per cent to 184 yen amid media reports of a coming sale.

Hit by a slump in the US, Ford is burning through its reserves and along with General Motors and Chrysler LLC, is seeking a $25 billion government lifeline to weather the deepening economic crisis.

General Motors has sold its remaining 3.02 per cent stake in Japan's Suzuki Motor for about $231 million.

Ford racked up a loss of $8.7 billion in the second quarter, its worst ever result, and has used up $11 billion of its cash stockpile in the past year.

Over the last decade, Ford helped engineer a turnaround at once-struggling Mazda, sending executives and sharing technology and auto parts to cut costs.

Hiroshima-based Mazda, which makes the RX-8 sports car and Miata roadster, said the two companies will continue their strategic relationship.

The Japanese automaker said it would purchase the shares sold by Ford along with "several of its strategic business partners".