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Sunday, June 03, 2007

Talks Still On With Volkswagen, General Motors On Proton, Says Khazanah

June 01, 2007 21:28 PM E-mail this news to a friend Printable version of this news

Talks Still On With Volkswagen, General Motors On Proton, Says Khazanah

KUALA LUMPUR, June 1 (Bernama) -- Volkswagen AG is still talking to national investment arm Khazanah Nasional Bhd on a possible strategic alliance with Proton, as is General Motors, but Khazanah Nasional managing director Datuk Azman Mokhtar was coy today on whether equity participation is still on the table.

He explained that when Prime Minister Datuk Seri Abdullah Ahmad Badawi said yesterday that VW was not interested in Proton's offer of an equity deal, he was in fact referring to his invitation to the German car maker to talk to him directly.

However, VW has continued to have talks with Khazanah, Azman said. "All the reported interested parties including Volkswagen and General Motors, except for Peugeot who have publicly stepped out of the equation, remain in the picture, notwithstanding some of the statements that may have been made earlier.

"The Prime Minister, I believe, was referring to the fact that Volkswagen had indicated they wanted a meeting from April, so I think he was still waiting (for feedback from Volkswagen by end of March).

"We briefed the Prime Minister today to explain that talks are indeed ongoing and meetings will be set fairly soon," he told reporters at the company's annual review media briefing here.

Azman said Khazanah, which has a 42.74 percent stake in the national car maker, has indeed been instructed by Abdullah to continue this process (negotiations with foreign parties).

A Hamburg report quoted a VW spokesman as saying today: "At the moment, a further round of talks is being prepared for the near future."

On the domestic side, Azman said several parties have declared their interest as well and remain in the picture.

"We are looking to narrow down the choices on both the international and local strategic alliance. I am determined to solve this soonest, certainly by the end of the year," said Azman.

However, he stressed that any structured process done to find a suitable partner will be in an orderly manner from a national governance point of view.

"We are willing and able to do the strategic alliance in a structure that will basically sell some equity to the partners," he said.

"We will be happy to share and work on collaborative models in terms of management, to bring in scale and technology.

"But we will also not disregard the considerable local capability that has been built up over the last 20 years."

Asked if it was conceivable for Proton to have both a local and foreign partner on board, Azman said: "It is not inconceivable."

He also added that Khazanah isn't surprised by the financial losses incurred by Proton but remains concerned with the declining performance in terms of operation.

Yesterday, Proton posted a pre-tax loss of RM619.9 million for the financial year ended March 31, 2007 compared with a RM46.4 million profit a year earlier.




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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)