Economic worries: Ford to sell 20% Mazda stake

The Japanese carmaker Mazda Motor has confirmed that troubled US carmaker Ford Motor will sell its 20% stake in the company.

Ford has a 33.4% stake in Mazda and the current move will decrease it to just over 13%.

Falling sales around the world has hit hard Ford and now the company is trying to raise cash along with its Detroit competitors.

After these reports about the possibility of the stake sale, shares in Mazda increased to 6.4% on Tuesday.

General Motors has already sold its 3% stake in Japanese carmaker company Suzuki.

There were reports about the possible sale of a 20% stake in Mazda more than a month ago.

The stake was valued at $850m at that time, but based share price of Mazda on Tuesday the value of the holding has dropped to $543m.

It was in 1979 when Ford first bought a stake in Mazda, then in 1996, it took control of the Japanese carmaker and saved it from possible bankruptcy.

Some media reports say that trading houses like Sumitomo and Itochu, car parts maker Denso, Japanese insurance companies and Mazda itself may be the possible buyers to purchase Ford’s stake in Mazda.

Chrysler, Ford and GM (known as ‘Big Three’) are trying to seek a $25bn share in US government emergency loan.