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Mazda to raise $1.1 bln, forecasts smaller loss

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[October 05, 2009]  TOKYO (AP) -- Japanese automaker Mazda now expects about half the red ink it previously forecast for the fiscal year, crediting a rise in demand from "green" car incentives, and said it will raise $1.1 billion to fund research and development.

RestaurantMazda Motor Corp. on Monday revised its forecast for the fiscal year through March 2010 to a 26 billion yen ($289.5 million) net loss -- about half the 50 billion yen ($556.8 million) loss that Japan's No. 4 automaker had projected in May.

Mazda also said it will issue new common stock later this month that will reduce former U.S. alliance partner Ford Motor Co.'s stake to 11 percent from 13.8 percent. The automaker will issue 460 million shares from Oct. 14 to Oct. 20, raising as much as 95.9 billion yen ($1.1 billion) for research and development into green cars and safety features.

In forecasting a smaller loss, Hiroshima-based Mazda said global sales for the fiscal year were expected to be stronger by 55,000 vehicles, rising to 1.155 million, from the earlier forecast of 1.1 million, helped by strong sales of the its high mileage Mazda3, called Axela in Japan.

Mazda said it will return to profitability earlier than it had expected, by the July-September period. Initially, it had expected to stay in the red until the second half of the fiscal year, which runs from October to March.

Like other Japanese automakers, Mazda has been battered by the global slump.

Its bigger Japanese rivals such as Toyota Motor Corp. and Nissan Motor Co. have all sunk into the red.

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In Monday's revisions, Mazda said it expects 2.13 trillion yen ($23.7 billion) in sales for the fiscal year through March 2010. It had previously expected 2.030 trillion yen ($22.6 billion) in sales.

For the last fiscal year, Mazda posted a 71.5 billion yen loss on 2.536 trillion yen in sales.

Questions remain about the long run future for Mazda in a troubled industry where even bigger players are faltering.

Until last year, Ford had a 33.4 percent stake in Mazda, and had been key in turning the automaker around, sending in executives, sharing technology and cutting costs by using the same auto parts.

Mazda shares fell 5.6 percent to 185 yen in Tokyo.

[Associated Press; By YURI KAGEYAMA]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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