TOKYO - Struggling Japanese automaker Mitsubishi said today it had sold its 7.93 percent stake in Perusahaan Otomobil Nasional Bhd (Proton), Malaysia's biggest carmaker.

Mitsubishi Motors Corp earned a capital gain of about eight billion yen (US$72.1 million) from the sale of 43.56 million shares worth about 11 billion yen, said Mitsubishi spokesman Mitch Hayes.

"We will use the proceed from the sales to rebuild and to strengthen our financial health," Hayes said.

Mitsubishi, which is 36.97 percent owned by German-US auto giant DaimlerChrysler, forecasts its group net loss will balloon to 72 billion yen in the year ending this month due to slumping sales in North America.

The company said it will maintain business ties with Proton through transferring technology and supplying parts and components as a supplier and partner.

Mitsubishi added it aimed to expand its product line-up in Malaysia, where its products have been relatively well received.

More to come?

Meanwhile, trading house Mitsubishi Corp, the core of the Mitsubishi group, denied reports it was also preparing to sell its 7.93 percent stake in Proton.

"We are aware of the news reports but the fact of the matter is nothing has been decided," a Mitsubishi Corp spokesman said.

Proton was established in 1983 by Malaysian companies as well as Mitsubishi Motors and some Mitsubishi group companies.

Mitsubishi Motors' pullout followed falling sales at Proton, which is confronted by intense foreign competition ahead of market liberalisation under the Association of Southeast Asian Nations Free Trade Area.

Proton's market share tumbled to 49 percent last year from 60 percent in 2002, with its car sales falling 27.5 percent to 155,420 units last year. - AFP