KUALA LUMPUR (XFN-ASIA) - Prime Minister Abdullah Ahmad Badawi said the government may allow Volkswagen AG (VW) to gain a controlling stake in ailing national carmaker Proton.
'It is an option we are considering at the moment. There is no approval yet,' Abdullah told reporters.
'It all depends on detailed discussions. It is just an option,' he said.
Proton's share price price was sharply higher on market talk about the possible partnership.
The Malaysian carmaker was previously in negotiations with VW over a cooperation accord but the talks collapsed early this year after Proton said it would not cede control to the German company.
Earlier in the week, reports said Malaysian auto company Mofaz Group wants to acquire part of the 38 pct stake in Proton owned by the government's investment arm, Khazanah Nasional, and take control of the company.
Proton recently signed a letter of intent with PSA Peugeot-Citroen to evaluate and study possible cooperation, with the first round of talks beginning in September.
At the close of trade today, Proton was up 0.20 rgt or 3.85 pct at 5.40.
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© 2006 AFX News
