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Written by: Staff

TOKYO, Mar 5 (Reuters) General Motors Corp is planning to sell its 20 percent stake in Japanese compact car maker Suzuki Motor Corp, the economic daily Nihon Keizai Shimbun (Nikkei) reported on Sunday.

Suzuki said in a statement that ''GM and Suzuki will not completely dissolve their capital alliance,'' adding that the two partners would continue their ''strong'' operational cooperation.

A Suzuki spokesman declined to elaborate on whether that was a denial of the report or whether it could signal a partial dissolution of their tie-up.

Sources quoted by Kyodo news agency said it was not immediately clear whether GM planned to sell the entire stake or to whom it planned to sell the shares.

Analysts have speculated GM might sell its stake in Suzuki as part of a wider asset restructuring by GM, which sold its stake in Fuji Heavy Industries in October.

According to the Nikkei, which said that GM's decision had been conveyed to Suzuki by Saturday, the price of the sale would be some 270 billion yen ($2.33 billion).

Last month, Suzuki posted a 5.5 percent rise in quarterly operating profit on brisk vehicle sales worldwide, and reiterated its forecast for higher full-year earnings.

For the year to March 31, the maker of the Swift compact car stood by its projection for an operating profit of 108 billion yen, which would be 0.4 percent better than last year and would mark the sixth straight year of record profits.

Shares in Suzuki, which has been boosting sales of motorcycles and cars in Asia and Europe, rose 4.0 percent during the three months to December.

($1=115.91 Yen) REUTERS SY RN1654

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