TOKYO, Oct 11: US giant Ford Motor Co. plans to sell most of its shares in Japan’s Mazda to raise badly needed cash amid the current global financial crisis, press reports said on Saturday.

Ford, Mazda’s biggest shareholder with 33.4pc equity, has begun to sound out a number of Japanese companies on the planned share sale, public broadcaster NHK reported quoting unspecified sources.

NHK said Mazda Motor Corp. itself was expected to buy-back some of the shares.

Mazda, Japan’s fifth largest automaker, said in a statement that it had not made any decision about its shares. “Any important decision should be disclosed on a timely basis,” it said.

An unnamed Mazda executive was quoted by the Nikkei business daily as saying: “It is true that we are making various studies on what we should do when (Ford’s share sale) becomes a reality.”

Ford plans to dump about 20 per cent of Mazda’s shares to raise about 100 billion yen ($1 billion), NHK said, adding that it expected to remain a major shareholder in the Hiroshima-based firm.

Ford invested in Mazda for the first time in 1979 and raised its stake to 33.4 per cent, or 473,535,000 shares, in 1996 when the Japanese carmaker’s business slumped.

The two companies have since profited from joint development of compact cars with Mazda recovering its financial health.

But in a turnaround of fortunes, Ford announced in July a record 8.7-billion-dollar loss in the second quarter.

Kyodo News said the US firm was seeking to cover restructuring costs due to significant sales decreases in the past months on the back of spikes in gasoline prices and a shift in consumer preferences to smaller fuel-efficient cars.—AFP