Tokyo/New York  - Mazda Motor Corp and other business partners plan to buy back a 20-per-cent stake of the Japanese automaker from Ford Motor Co on Wednesday, the automakers said Tuesday.

Ford will reduce its share of Mazda to 13 per cent from the current 33.4 per cent in order to raise badly needed funds. The second-largest US automaker said it hopes to raise 540 million with the sale.

Mazda was expected to purchase a 6.9 per cent stake of 96.8 million shares for 184 yen per share, worth a total of about 17.9 billion yen (185.18 million dollars), the Japanese company said. The rest of the shares are to be sold to other unidentified investors.

But the two companies would continue their 30-year business partnership while keeping their joint ventures, Mazda and Ford said.

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," Ford president and chief executive Alan Mulally said in a statement.

He will join the chief executives of General Motors Corp and Chrysler LLC in addressing the US Senate Banking Committee later Tuesday. The US auto industry has been hard hit by the weak global economy and declining sales as customers in recent years have shunned Detroit's larger, gas-guzzling models in favour of more fuel efficient and international models.

The so-called Big Three are seeking a cash infusion from the government to prevent the industry from collapsing, with some Democrats calling for the companies to be included in the 700- billion-dollar bail-out of the financial sector.

General Motors sold its stake in Suzuki Motor Corp Tuesday to raise funds. (dpa)