Published on: Wednesday, December 28, 2005 |
Kuala Lumpur: Malaysia's troubled national carmaker Proton said Tuesday it has sold its controlling stake in debt-ridden motorcycle maker Augusta SpA to Italy's Gevi SPA for a token sum of one euro (RM4.5).
In taking over the 57.75 percent stake in Augusta, Gevi will assume Augusta's restructured frozen debts of 106.9 million euros (RM481mil) and working capital requirements of 32.5 million euros (RM146mil), it said in a statement.
Proton said the sale of the Italian motorcycle firm, which it rescued a year ago with a 70 million euro (RM315mil) investment, was in line with its strategy of divesting non-core assets.
The carmarker said the sale is not expected to have any effect on its earnings, net assets, share capital or shareholdings.
Ahead of the market opening on Tuesday, Proton suspended trade in its shares, and is expected to resume trading on Wednesday.
Proton suffered a net loss of RM154.33 million for the second quarter to September from a profit of 198.91 million a year ago.
It attributed the loss to provisions totalling RM160.7 million, mainly for the troubled Italian motorcycle unit. Proton used to sell six out of every 10 new cars in Malaysia but sales have been tumbling for the past few years as the national automaker feels the bite of growing foreign competition while the government whittles away protection.
From a market share of 60 percent in 2002, Proton saw a decline to 48 percent in 2003 and then 44 percent in 2004. - AFP
