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Lotus in talks with Proton over link-up

John Willcock
Tuesday 22 October 1996 18:02 EDT
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Lotus Cars, the troubled British sports car and consulting firm, said yesterday that it was in talks with a Malaysian car maker over a "technical collaboration".

The statement was issued to scotch reports from the Far East that the owner of Lotus, the Italian financier Romano Artioli, was close to selling 80 per cent of the company for $84m (pounds 53m) to the Malaysian company Perusahaan Otomobil Nasional Berhad, otherwise known as Proton.

"It's not true," said Alastair Florance, a spokesman for Lotus. "He's [Artioli] looking for an investor or a partner, not a buyer."

The denial, though, leaves more question marks hanging over the future of Lotus as Mr Artioli's Bugatti businesses in Luxembourg and Italy linger in bankruptcy.

Lotus said earlier this year that it would bring in a new partner by the end of September to help finance its debt. There has been speculation that South Korea's Daewoo Motors would buy Lotus for about pounds 50m, a suggestion Daewoo denied as recently as 30 September.

Yesterday Lotus said it sold one of its Elise sports cars, which retail for pounds 20,000, to Proton as part of the talks over a technical alliance. The car is being shipped to Malaysia for Proton's experts to examine.

The link-up could be purely in the consulting field. Around two-thirds of Lotus's business is providing technical consulting services to big car makers like General Motors.

Proton, whose other big shareholders include the state investment arm and Mitsubishi Motors, is under increasing pressure to expand overseas and introduce more sophisticated production techniques as Malaysia's protected domestic car market is opened up.

Proton has done well in mass- producing small cars, but observers believe it needs outside expertise, such as would be provided by Lotus, to build larger engines for top of the range cars.

The Lotus spokesman specifically denied that a transaction with Proton would include the Malaysian firm purchasing a chunk of Lotus. He affirmed Mr Artioli's earlier assertions that he wants a partner to help Lotus expand its sports car and consulting businesses.

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