Japan's Mitsubishi is in talks to sell its stake in Malaysian state-controlled auto maker Proton back to the government as Proton steps up its search for a new foreign partner to help it battle falling sales.
A sale would mark an end to Mitsubishi's 19-year partnership with Proton, the national car firm that makes a ubiquitous car modelled on Mitsubishi designs.
A source close to Malaysia's state investment arm Khazanah Nasional told Reuters on Friday the agency had been invited to buy Mitsubishi's stake in Proton, but no decision had been reached.
"Khazanah was approached two to three weeks ago," said the source.
Mitsubishi, which is battling to revive its own car-making business, has indicated Proton asked the Japanese car maker to sell the stake back to the government. Proton is looking for another partner to help it develop new models.
Mitsubishi Corp and Mitsubishi Motors each have a 7.9 percent stake in Proton. At current market prices, the stake is valued at around $219 million.
A Mitsubishi Motors spokesman in Tokyo said no decision had been made on whether the company was going to sell its stake.
But Mitsubishi Motors Chief Executive Rolf Eckrodt indicated this week that Proton wanted out of the partnership.
Mitsubishi Motors, Japan's fourth-largest auto maker and owned 37 percent by DaimlerChrysler AG, has been battered by loan control problems at its North American finance unit.