GM 'interested' in Malaysia's Proton, CFO Henderson says

DETROIT (Reuters) -- General Motors is interested in state-controlled Malaysian automaker Proton Holdings Bhd., GM's CFO said Tuesday.

"We are interested but there are many other players interested," CFO Fritz Henderson said, speaking to reporters on the sidelines of the Automotive News World Congress in Dearborn, Mich., though he provided no further details.

The Malaysian government said this week GM was interested in Proton, but GM had declined comment so far.

GM joins a growing list of global carmakers seeking an equity stake or technical partnership in the Southeast Asian automaker.

Malaysia's second finance minister, Nor Mohamed Yakcop, said France's PSA/Peugeot-Citroen and Germany's Volkswagen AG were also interested in Proton.

The Business Times, a Malaysian newspaper, said on Saturday, Jan. 13, that GM was prepared to offer as much as much as $2.85 (or 10 ringgit) for each Proton share, valuing the Malaysian firm at $1.6 billion, if the U.S. automaker is given control of Proton's finances and manages its vendor system.

But Henderson said it was too early in the bidding process to provide any details. GM's interest in Proton comes at a time when it is looking for additional capacity in emerging markets, with a focus on rapid growth in Asia.

Even as the world's largest automaker is expected to be challenged for the top spot in global sales by Japanese rival Toyota Motor Corp. this year, CEO Rick Wagoner has said he expects the company to continue to grow sales outside the United States.

Overseas sales accounted for 55 percent of GM's total revenue in 2006 -- a trend Wagoner has said will continue in the next few years.

GM, which lost $10.6 billion in 2005 and has lost $4.8 billion in the first three quarters of 2006, is in the middle of a restructuring as it cuts billions of dollars in costs.

The Business Times said GM planned to submit a bid for Proton this week, quoting sources familiar with GM's operations in Malaysia.

Malaysia's government controls Proton through its state-investment firm Khazanah Nasional Bhd. It also controls an undetermined additional amount of Proton through direct and indirect holdings held by other state firms and agencies.

Proton lost $69.05 million (or 250.3 million ringgit) in the three months ended Sept. 30, its fourth quarterly loss in less than two years, as a slump in its car sales worsened.

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