Mazda to Raise $1.1B to Contend with Hybrid Leaders

Washington DC October 5, 2009; The AIADA newsletter reported that Japan's Mazda Motor Corp. said it would raise up to $1.1 billion in a share sale and invest most of the funds to develop hybrid and other technologies in what analysts said was a long-overdue bid to close the gap with rivals.

According to Automotive News, Mazda has been seen as a laggard in next-generation car technologies. Mazda, Japan's fifth-largest Japanese automaker, also halved its net loss forecast for the year to March, citing a stronger euro, cost cuts and better-than-expected sales globally.

Mazda said in a statement on Monday that it would raise up to 95.9 billion yen ($1.1 billion) by issuing 315.2 million new shares and selling 96.8 million treasury shares. The news could trigger selling of Mazda's stock over the near term as the offering could boost the total number of shares outstanding by up to 26 percent, according to one analyst.

Mazda has pledged it will improve its cars' fuel economy by 30 percent mainly by improving its internal combustion engines by 2015. It plans to gradually add electric components such as a hybrid system beyond that to meet stricter regulations.