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Malaysia's Proton evaluates eight foreign suitors

KUALA LUMPUR -- Proton Holdings is reviewing proposals from at least eight foreign companies interested in taking a strategic stake in the failing Malaysian national carmaker.

Japan's Mitsubishi Corp. divested its stake in Proton in January 2005. Subject to negotiations, foreign capital could be injected as early as the first quarter of 2017 to help Proton recover market share under a state-sponsored restructuring plan.

"We have sent out 14 requests for proposal in the past few months and eight of them have responded," Chief Executive Ahmad Fuaad Kenali told the Nikkei Asian Review (NAR) on the sidelines of a new model launch.

Kenali said the eight are all reputable global carmakers, and that Proton partnering a foreign brand would accelerate the development of new models for Southeast Asian markets and reduce costs.

Proton's admission confirmed a NAR article last month citing a government official who said the ailing carmaker was reviewing foreign partnership proposals.

Madani Sahari, chief executive of the Malaysia Automotive Institute, told NAR the government wants a foreign partner to take an equity stake in Proton and provide capital and technology inputs.

The government stepped in with a soft loan of 1.5 billion ringgit ($373 million) in June after Proton faced difficulties in paying suppliers. In return, the carmaker is expected to secure a strategic partnership with a foreign marque to manufacture cars for the domestic market and export.

Proton's parent DRB-Hicom has said it will continue to hold a "substantial stake", and has no intention of bowing out.

Proton has two factories running at about one third of their 350,000-vehicle annual capacity. Its market share has eroded to just 13% from a peak in 1993 when seven in every ten cars sold were Protons.

On Tuesday, Proton launched its second generation Persona, a 1600cc B-segment sedan designed for young adults. Costing 46,800-58,800 ringgit, the Persona is touted as the "cheapest" car in its class.

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