National car maker Proton Holdings Bhd is looking to let go as much as 51 percent of its stake as part of the strategy to seek a foreign partner and generate cash flow to weather the currently less than fair trade winds, reports Bloomberg.
Quoting sources, the business publication said Proton is looking at Volkswagen AG’s Skoda unit and Suzuki Motors Corp, as well as perusing proposals from companies including Renault SA and Peugeot parent PSA Group, in separate closed-door negotiations.
According to the report, Proton hopes to shortlist the final candidates that it may let go of its controlling stake to, which would also include control of British sports-car maker Lotus Cars Ltd, next month.
Malayan Banking Bhd was reportedly engaged "to advise on the sale" with company officials expected to head to Japan to meet with Suzuki executives next week, followed by meetings with Renault next month.
Bloomberg has not as yet received Proton's comment on the matter, while inquiries to Suzuki, Skoda and Malayan Banking received no comment.
Renault told the business paper that it “regularly explores new business opportunities as it expands its global footprint", and PSA confirmed it is bidding for Proton.
According to its June statement, DRB-Hicom Bhd, which controls Proton and is in turn controlled by tycoon Syed Mokhtar Al-Bukhary, must “seek and identify a strategic and renowned partner” to help in research and development for the company to become a competitive player in the global automotive industry".
Bloomberg also reported that Proton shares gained 1.4 percent to RM1.47 per share yesterday morning.
According to the report further, Proton is struggling from accumulated debts due to sales slump and the company needs to bring in a foreign partner, a condition it agreed to in order to get a government bailout of RM1.5 billion.
The government had agreed in April to bail out the debt ridden national car maker but had imposed conditions that the company comes up with a firm restructuring plan before it will come in with the much needed cash.
The bail out was announced just eight days after Proton's former chairperson and spiritual founder, ex-prime minister Dr Mahathir Mohamad, tendered his resignation.