Ford Sells Mazda Stake

Mindcore · 11-18-2008, 10:06 AM

Ford sells Mazda stake to raise cash

JAY ALABASTER

The Associated Press

November 18, 2008 at 7:34 AM EST

TOKYO — Ford Motor Co. is slashing its stake in Japan's Mazda Motor Corp. by nearly two-thirds, joining other struggling U.S. automakers in a fire-sale of 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 separate statements.

The sale would net Ford 52-billion yen ($540-million U.S.) based on Mazda's closing price Tuesday, barely a quarter of what a 20 per cent stake in the Japanese automaker was worth one year ago. Mazda's shares rose 6.4 per cent to 184 yen Tuesday amid media reports of a coming sale.

Meanwhile, the head of Ford says the company is working hard to “transform” the business into a more profitable one that meets 21st century demands for fuel-efficient vehicles.
Ford is selling its stake in Mazda

Ford's chief executive officer Alan Mulally said he'll make that argument to members of Congress Tuesday as the country's Big Three automakers plea again for federal financial assistance. They are scheduled to testify later Tuesday before the Senate Banking Committee.

Mr. Mulally denied on ABC's “Good Morning America” that automakers resisted restructuring their companies to meet current marketing realities.

Mr. Mulally also took exception to charges the company had been badly managed.

Hit by a slump in the U.S., Ford is burning through cash reserves and, along with General Motors Corp. and Chrysler LLC, is seeking a $25-billion government lifeline to weather the deepening economic crisis. On Monday, GM said it would sell its remaining 3.02 per cent stake in Japan's Suzuki Motor Corp. for 22.37-billion yen.

Ford racked up losses of $8.7-billion in the second quarter, its worst result ever, and has used up $11-billion of a cash stockpile in the past year. The share sale was “in line with Ford's plan to strengthen its balance sheet,” it said.

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

Ford and Hiroshima-based Mazda, which makes the RX-8 sports car and Miata roadster, said they will maintain their strategic relationship. Ford said it will remain Mazda's largest shareholder and they will continue to share core design platforms and key components.

Mazda said it will buy up to 6.87 per cent of its own shares for as much as 17.9-billion yen through an off-hours trading system on Wednesday morning and several “strategic business partners” will mop up the rest.

The company was mum on the identities of the other buyers, but media reports mentioned Japanese companies including regional Hiroshima Bank, trading houses Sumitomo Corp. and Itochu Corp., insurance firms including Tokio Marine Holdings Inc. as well as auto parts maker Denso Corp., as purchasers.

11-18-2008, 10:06 AM	#1 (permalink)
Mindcore Administrator Join Date: May 2007 Location: Look Out!!! Posts: 1,307	Ford Sells Mazda Stake Ford sells Mazda stake to raise cash JAY ALABASTER The Associated Press November 18, 2008 at 7:34 AM EST TOKYO — Ford Motor Co. is slashing its stake in Japan's Mazda Motor Corp. by nearly two-thirds, joining other struggling U.S. automakers in a fire-sale of 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 separate statements. The sale would net Ford 52-billion yen ($540-million U.S.) based on Mazda's closing price Tuesday, barely a quarter of what a 20 per cent stake in the Japanese automaker was worth one year ago. Mazda's shares rose 6.4 per cent to 184 yen Tuesday amid media reports of a coming sale. Meanwhile, the head of Ford says the company is working hard to “transform” the business into a more profitable one that meets 21st century demands for fuel-efficient vehicles. Ford is selling its stake in Mazda Ford's chief executive officer Alan Mulally said he'll make that argument to members of Congress Tuesday as the country's Big Three automakers plea again for federal financial assistance. They are scheduled to testify later Tuesday before the Senate Banking Committee. Mr. Mulally denied on ABC's “Good Morning America” that automakers resisted restructuring their companies to meet current marketing realities. Mr. Mulally also took exception to charges the company had been badly managed. Hit by a slump in the U.S., Ford is burning through cash reserves and, along with General Motors Corp. and Chrysler LLC, is seeking a $25-billion government lifeline to weather the deepening economic crisis. On Monday, GM said it would sell its remaining 3.02 per cent stake in Japan's Suzuki Motor Corp. for 22.37-billion yen. Ford racked up losses of $8.7-billion in the second quarter, its worst result ever, and has used up $11-billion of a cash stockpile in the past year. The share sale was “in line with Ford's plan to strengthen its balance sheet,” it said. Over the last decade, Ford helped engineer a turnaround at once-struggling Mazda, sending executives and sharing technology and auto parts to cut costs. Ford and Hiroshima-based Mazda, which makes the RX-8 sports car and Miata roadster, said they will maintain their strategic relationship. Ford said it will remain Mazda's largest shareholder and they will continue to share core design platforms and key components. Mazda said it will buy up to 6.87 per cent of its own shares for as much as 17.9-billion yen through an off-hours trading system on Wednesday morning and several “strategic business partners” will mop up the rest. The company was mum on the identities of the other buyers, but media reports mentioned Japanese companies including regional Hiroshima Bank, trading houses Sumitomo Corp. and Itochu Corp., insurance firms including Tokio Marine Holdings Inc. as well as auto parts maker Denso Corp., as purchasers. __________________ core Mazda Forums .

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