Mazda Says Ford to Cut Stake to 13%

Updated from 5:10 a.m. EST

TOKYO (AP) -- Japan's Mazda Motor says U.S. automaker Ford Motor (F Quote) will cut its stake in Mazda to 13% from 33.4%.

Mazda said Tuesday it would spend up to 17.9 billion yen, or $185.3 million, to buy back up to 6.87% of its own shares in a Wednesday morning off-hours purchase.

The rest of the stake is to be bought by a group of Mazda's business partners. The company was mum on the identities of the other buyers, but media reports mentioned Japanese companies including regional Hiroshima Bank, trading houses Sumitomo and Itochu, insurance firms including Tokio Marine as well as auto parts maker Denso, as purchasers.

The sale would provide Ford some desperately needed cash as it awaits a decision from Washington on government aid for the auto industry. Ford, along with fellow U.S. automakers General Motors (GM Quote) and Chrysler , are seeking a $25 billion government lifeline to weather the deepening economic crisis.

GM on Monday said it would sell its remaining 3.02% stake in Japan's Suzuki Motor Corp. for 22.37 billion yen ($230 million).

In a statement Tuesday, Ford said the sale would net it about $540 million.

"This agreement allows Ford to raise capital that will help fund our product-led transformation, and at the same time, allows Ford and Mazda to continue our successful strategic relationship in the best interest of both companies," said Ford President and CEO Alan Mulally. "Ford will continue to focus on the Ford brand worldwide and deliver the products our customers really want and value."

Ford and Mazda plan to continue ongoing joint ventures, as well as the sharing of platforms and powertrains. Ford said it will remain Mazda's largest shareholder and will maintain a seat on Mazda's board.