Malaysia's Proton may sell stake to foreign company

KUALA LUMPUR, Jan 12 (Reuters) - Malaysia's national car company Proton Holdings (PROT.KL) may sell a controlling stake to a foreign carmaker, company Chairman Nadzmi Mohd Salleh told the Business Times newspaper.

"If Proton is a problem child, we have to let it go," Nadzmi told the paper in an interview published on Monday.

"But if you want to enhance Proton's capability and also the viability over a period of difficult times, then the collaboration with the foreign car makers has to take a different form," Nadzmi was quoted by the paper as saying.

State-owned Proton, which has seen its domestic market share fell to below 30 percent from more than 60 percent in the 1990s. In 2007, it held talks with Germany's Volkswagen (VOWG.DE) and U.S. auto giant General Motors GM.N on a possible partnership.

But the talks collapsed due to disagreements over the deal structure in a company that the Malaysian government regards as a national asset.

Proton made a net profit of 43.81 million Malaysian ringgit ($12.38 million) in the second quarter.

Proton has been approached by car companies from Japan and the U.S as well as India, Nadzmi was quoted by the Business Times as saying.

"If they (foreign car makers) buy a stake in Proton, they can get the 29 percent (Malaysian market) share that Proton has. They know what they want, it is up to the shareholders to decide if they want to sell Proton," said Nadzmi who was appointed on Jan. 1.

(Reporting by Soo Ai Peng; Editing by David Chance)