| The shares of the troubled Malaysian | | | | ringgits to get the company started. |
| carmaker Proton has increased slightly | | | | Proton's state investment arm Khazanah |
| last Monday after reports has come out | | | | Nasional is the controlling shareholder |
| that its deal with Europe's largest | | | | in proton owning 42.74 percent stake. |
| automaker and producer of | | | | Meanwhile the state pension fund EPF and |
| top-of-the-line quality VW Beetle parts | | | | the national oil firm Petronas have a |
| is getting closer to a deal. | | | | share of 12.07 percent and 8.84 percent |
| Analysts said that such positive news | | | | respectively. |
| matched with a plan of the government to | | | | Khazanah's Managing Director Azman |
| remove cars that are 15 years old and | | | | Mokhtar has set the end of this year as |
| older have lured investors to the | | | | the deadline for the completion of the |
| company. According to the Edge business | | | | deal with Volkswagen. |
| newspaper last Monday, "Malaysian | | | | Analysts have also attributed the |
| representatives of Proton's stakeholders | | | | increase in Proton shares to government |
| have inched closer to a final deal with | | | | programme which will scrap old cars |
| Volkswagen." | | | | giving Proton the opportunity to |
| Proton's shares were up by 0.05 ringgit | | | | increase its sales. According to the |
| or 0.86 percent and close at 5.85 | | | | Edge business magazine the said |
| ringgit after reaching as high as 6.10 | | | | programme was aimed to boost Proton's |
| ringgit in late trade. | | | | sales. Quoted on the magazine: "It has |
| Volkswagen met with Proton for the third | | | | been decided that those who voluntarily |
| time in Germany recently after its | | | | scrap their cars will be offered a |
| earlier meetings in Thailand and the | | | | subsidy to buy a new Proton car. The |
| United States. The foreign tie-up with | | | | subsidy will be on a scale with a |
| Proton is very important for the | | | | maximum of 5,000 ringgit." |
| Malaysian automaker in order for it to | | | | Last Monday Aseambankers has also |
| stop the decline in its market share and | | | | expressed its plan to reinforce Proton's |
| to stop incurring further losses. | | | | share price and was quoted by the Edge |
| The Edge business newspaper has also | | | | saying, "although we remain cautious of |
| pointed some details of talks wherein | | | | Proton's ability to deliver more than |
| Proton will still be controlling its | | | | marginal profitability." |
| domestic distribution network while | | | | It can be noted that Proton has lost its |
| Volkswagen will take care of the | | | | status as Malaysia's biggest-selling |
| international distribution. | | | | automaker to its rival Perodua and just |
| The Edge has also stated that Volkswagen | | | | recently has reported net losses |
| may be required to cash out for its 51 | | | | reaching as high as 591.36 million |
| percent equity in Proton. Volkswagen | | | | rinngit or $172.4 million through March |
| will have to invest few hundred million | | | | 2007. |