| Proton and Volkswagen have moved a step closer to | | | | Wednesday the country wants to sell its stake in |
| a partnership deal after recent talks, a Malaysian | | | | Proton but would not act hastily in the matter. |
| newspaper reported on Saturday, reported Reuters. | | | | “What we are looking for now is for somebody to |
| Shares of Proton Holdings Bhd., the unprofitable | | | | buy the government-owned shares and that |
| Malaysian carmaker, rose on a report that the | | | | somebody should be able to provide the right kind of |
| Volkswagen AG may have agreed to share | | | | technology,” Aziz said in Tokyo. |
| technology with the company and to buy a stake in its | | | | “The pact seems to be just waiting for a formal |
| manufacturing unit, reported Angus Whitley of | | | | conclusion,” said Mohd Hanafi, an analyst at Alliance |
| Bloomberg. | | | | Research Sdn. in Kuala Lumpur with a “buy'' rating |
| Proton has been struggling with an increasingly declining | | | | on Proton stock. “Any sort of new development |
| market share in Malaysia due to close auto | | | | which is positive would definitely have an impact on |
| competition. It has been unable to make up the | | | | the share price.'' |
| underperformance through exports. This is why the | | | | According to estimates by Hwang-DBS Vickers |
| Malaysian carmaker is finding ways to cope. And VW | | | | Research Sdn, control of Proton's carmaking division |
| wheels could serve as the key element to move on. | | | | may cost 900 million ringgit or $263 million. The |
| After the Edge magazine said that VW may pay | | | | state-run carmaker needs an equal to help produce |
| several hundred million ringgit and supply vehicle | | | | fresh product lines and turn around declining sales. |
| platforms as part of an accord, Proton stock climbed | | | | Mohd Asuki Abas, a spokesman for Khazanah |
| as much as 5.2 percent. VW, Europe's biggest | | | | Nasional Bhd., declined to comment on the report. |
| carmaker, will own 51 percent of a new company that | | | | Khazanah, a Malaysian government investment unit, |
| will acquire Proton's manufacturing arm, said the Edge | | | | owns 43 percent of Proton. Faridah Idris, a |
| financial weekly. | | | | spokeswoman for Proton, said that she was unable to |
| Under the new agreement, Proton will control its | | | | comment immediately, said Bloomberg. |
| domestic distribution network while Volkswagen will | | | | Proton shares increased about 30 sen to 6.10 ringgit |
| handle international distribution, the Edge said, quoting | | | | and traded at 5.90 ringgit at 10:57 a.m. in Kuala Lumpur. |
| sources who spoke on condition of anonymity. “It is | | | | The stock has fallen eleven percent this year |
| also understood that VW may have agreed to pay | | | | compared with a 26 percent gain by the Kuala Lumpur |
| some cash for its 51 percent equity in the new | | | | Composite Index. |
| company that will own key assets of Proton,” the | | | | According to the deal, Proton will control domestic |
| paper reported. | | | | vehicle distribution and VW will oversee international |
| Meanwhile, state investment arm Khazanah Nasional | | | | sales, the magazine said. Khazanah Managing Director |
| Bhd, which owns 43 percent of Proton, is in talks with | | | | Azman Mokhtar said on June 26 that he plans to find |
| Volkswagen and the largest American automaker | | | | a partner for Proton before the end of the year. |
| General Motors Corp. to sell some of its stake in the | | | | A tie-up between Proton and GM is unlikely because |
| loss-making company. The balance of the equity will | | | | Proton sells vehicles in Iran, the Edge said. It added GM |
| be satisfied with injection of technology and platforms. | | | | stipulated that Proton must pull out of Iran, a condition |
| Rafidah Aziz, Malaysia's trade minister said | | | | that would not be met. |