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Free Website Counters SPY the Man: 13-06-07: PM: Proton-VW talks positive

Wednesday, June 13, 2007

13-06-07: PM: Proton-VW talks positive

Another round of talks between the government and Volkswagen AG of Germany on a tie-up with Proton Holdings Bhd will be held in Bangkok “soon”, Prime Minister Datuk Seri Abdullah Ahmad Badawi said yesterday.

It is believed that details of a possible merger between the two companies will be fine-tuned then.

Abdullah described the New York talks as “positive” but declined to elaborate, when commenting to reporters on the latest developments concerning negotiations with VW.

According to those close to the negotiations, the New York talks were “positive” in that there were only a few areas where accord was not reached.

The Edge Financial Daily reported last Thursday that high-level talks between VW and Proton were held in New York.

It was reported that talks were at the final stage and that Sime Darby Bhd may take over Khazanah Nasional Bhd’s stake in Proton. It is believed that the same parties would meet in Bangkok.

However, a VW spokesman had denied The Edge Financial Daily report to Bloomberg. “This report is definitely wrong and only rumour without substance,” Andreas Meurer, VW’s Germany-based spokesman had said in a phone interview with Bloomberg last week. “We will have a round of talks soon,” he was quoted further.

It is understood that the Malaysian side was represented at the New York negotiations by representatives from the Prime Minister’s department, Khazanah and Sime Darby.

Sources close to the government had indicated that Sime Darby may take over Khazanah’s 42.7% stake in Proton if “the need arises”.

It had been earlier speculated in a foreign press report that Sime Darby’s chief executive Datuk Ahmad Zubir Murshid may have played a facilitating role in the New York talks.

According to sources, the details of the deal are “not far off” from what has been bandied around for the last two-and-a-half years.

“VW’s plan to take a 51% stake in a new company in which will be housed key Proton assets has not changed over the last two years,” said a source.

The VW plan as announced was to acquire Proton’s manufacturing, research & development and engineering divisions, including its loss-making UK subsidiary, Lotus.

VW had also indicated earlier that the cars it manufactures with Proton in Malaysia would be for both the domestic and regional markets initially, where it would be marketed as Protons.

VW’s plans include using Malaysian vendors and parts manufacturers, in an approach not dissimilar to the model it used when taking over Skoda of then Czechoslovakia.

Meanwhile, it is believed that the plan for Sime Darby to take over Khazanah’s block is also a rehashed version of an original plan submitted last year.

One source said: “Sime’s Proton plan was the first on the table, even before the Naza Group’s and DRB Hicom Bhd’s. However, they withdrew their proposals late last year.”

It is believed that Sime Darby withdrew its proposal when it was decided that Khazanah should remain Proton’s local owner and work with the foreign partner.

Proton fell 15 sen to RM6.10 yesterday.

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What is the main factor for you to buy a Proton Car?
Low price and no other choice due to budget
Good resale value
Low maintenance cost
Ride & Handling is good
Reliable parts, chasis and engine
Good Styling exterior & Interior
Patriotism (I support Made in Malaysia Products)
Follow others (Follow Majorities should be the best choice)