Tuesday, September 05, 2006

Second Finance Minister Shoots Down Proton Stake Buy Rumour.

Second Finance Minister, Tan Sri Nor Mohamed Yakcop, confirmed Tuesday the government has not received any proposals for the purchase of Khazanah Nasional Bhd's stake in Proton Holdings Bhd. He was commenting on newspaper reports that local assemblers and distributors, Naza Group and DRB-HICOM Bhd, have submitted proposals to acquire Khazanah's 42.7 percent stake in Proton. "No, we have not receive (any proposals)," he told reporters.

The reports quoted an unnamed Proton source as saying, "It is unlikely that we will accept a proposal that will not safeguard the long-term interest of the national auto industry."

Sources said the proposal would involve buying out Khazanah's 42.7 percent stake in Proton, which at current prices would be worth just RM1.2 billion, or RM5.20 per share. Khazanah paid between RM7.87 and RM8.90 to acquire its Proton stake. Proton Tuesday closed unchanged at RM5.05 with 729,000 shares traded. Thus, Khazanah is unlikely to want to sell at current prices. However, sources said the government intends to settle the Proton issue urgently.

Meanwhile, asked on Proton's revival plan, Nor Mohamed said the government hoped the national car company could come out with a concrete proposal by year-end. "They (Proton) are working on the plan. It is on fast-track basis and there is no deadline for them (to reveal the plan) but hopefully they will do it by year-end," he said.

Asked whether Proton was looking to tie up with a foreign investors, he said, "I can't tell you, let them work out on the proposal." Proton, which in January ended talks with Volkswagen over stake sale, is currently working on plan to curb losses and boost its sales.

**** All the best to Proton. Let us not hit the company when it is down and almost out. Wish it well. It'll need all the luck it can get.


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