Tesco Stores Malaysia is in discussions for a loan from local banks to fund expansion in the country.
The business is a joint-venture between Tesco, which holds 70 per cent, and local partner Sime Darby Bhd, which holds the remainder.
A Tesco spokesman said a final decision on the loan had not been made.
'Generally, finance comes centrally from Tesco, but the decision is based on good business sense,' he said. 'If opportunities arise locally (for good rates of interest) we will consider them.'
Tesco Stores Malaysia chief executive Simon Turner was quoted last week by local press as saying profitability in the country would be delayed by a year, to 2006, because of the introduction of new hypermarket regulations last year.