Malaysian conglomerate Sime Darby is planning to buy a 32 percent stake in national carmaker Proton from the government's investment arm, Khazanah Nasional Bhd, a report said today.

The Edge financial weekly newspaper cited unnamed sources as saying that Sime will pay for the stake either in cash, new shares, or a combination of both. Khazanah owns a 42.7 percent stake in Proton.

The weekly also said that the Proton shares would be valued at between RM8.50 and nine ringgit a share.

At these levels, it is estimated that Sime could end up paying between RM1.5 billion and two billion ringitt for the Proton stake, it said.

The report said that the Sime proposal would also cement planned collaboration with German automaker Volkswagen AG. It said that South Korea's Hyundai Motor Co could also be offered a collaborative tie-up with Proton.

Proton, whose sales have declined due to competition from imports, recently announced a RM12.35 million net loss in its first quarter to June, compared with a profit of RM166.47 million a year earlier.

Proton used to sell six out of every 10 new cars in Malaysia but sales have been tumbling over the past few years due to growing foreign competition.

Sime Darby's business activities include auto distribution, plantations, property, heavy equipment and energy.