Proton stake will be taken by either DRB-Hicom or Naza from Khazanah Nasional Bhd. Proton needs additional financing for them to extend their business and new strategies to penetrate global market. DRB-Hicom seems to be the winner for the bid to take Proton’s stake and we hope it is not Naza due to Naza’s track record of handling customers in this business is pretty bad. DRB-Hicom has a much more respected automotive business profile. Read full few news from bernama below.
KHAZANAH TO SELL STAKE IN PROTON HOLDINGS BHD
Proton Holdings Bhd’s adviser, Tun Mahathir Mohamad said he would like to see the company with the biggest amount of money to buy the stake that Khazanah Nasional Bhd plans to sell.
“At the moment, Proton cannot make progress, introduce new vehicles and all that, because of shortage of funds,” he said at a press conference after officiating the launch of Sahara Run Gold Dinar here today.
Mahathir said that Khazanah should make a decision because the shares belonged to the company.
“I heard it (Khazanah) wants to sell but has not made an announcement. It can be good, depends on who is taking over and how much they are paying,” he added.
Mahathir’s worry is that if the price of the shares are too high, turning around the company may become difficult.
“Like everything else, if the capital cost is very high, it’s very difficult to make a profit,” he said.
Mahathir said his concern was for Proton to be well managed and be a successful company, adding that he will not “make any money from that.”
He also said that the buyer of the stake will have to make a general offer (GO) if it buys more than 30 per cent equity interest.
“I understand that Khazanah has 42 per cent to sell, so whether DRB-Hicom or whoever, the buyer has to make a GO for the rest of the shares,” he said.
Asked his opinion on a GO for Proton, he said that he was “not okay with it”, adding that it was not because the buyer would be taking Proton away but because the cost will be very high and that would make turning it around very difficult.
“The buyer will have to inject more money into Proton, maybe another RM2 billion more,” he explained.
Therefore, the company that buys the stake must be financially strong and know how to manage or it may result in the company losing and that will hurt Proton.
“I don’t want Proton to be hurt, I don’t care if others are hurt, but not Proton,” he added.
Proton Holdings Bhd said today Khazanah Nasional will make the necessary disclosure at the appropriate time pertaining to the sale of its stake in Proton to DRB-Hicom Bhd.
In an announcement to Bursa Malaysia today, Proton said it was informed this by Khazanah after making due enquiry with its major shareholder following news reports that Khazanah was selling its 42.7 per cent stake in Proton to DRB-Hicom.
“Khazanah Nasional informed that in its normal course of business, it regularly receives proposals, enquiries and expressions of interest in relation to its various investments and companies where it has interest in, including Proton.
“We wish to reiterate that in the meantime, business is as usual at Proton,” the national carmaker said.
Conglomerate, DRB- Hicom Bhd, is likely to win the bid for Khazanah Nasional Bhd’s 42.7 per cent stake in Proton Holdings Bhd, given its sound financial and management capabilities, Proton adviser, Tun Dr Mahathir Mohamad, said Monday.
“DRB Hicom is quite well run. They also produce cars for Suzuki, Mercedes and Volkswagen. This company also belongs to the Al-Bukhary Group, which has a lot of other businesses, including port operations.
“They seem to be able to do business,” the former prime minister said in an interview with Bernama and Bloomberg.
Besides DRB-Hicom, Proton’s major shareholder, Khazanah Nasional, had approached Naza Group of Companies, Sime Darby Bhd and several other local companies to buy the stake, he said.
Sime Darby rejected the offer, said Dr Mahathir, who is also Proton founder.
Dr Mahathir said Naza has come up with a proposal and appears to be interested.
Dr Mahathir said he was not backing any company and it was up to Khazanah, the government’s investment arm, to decide (on the successful bidder).
“The buyer must have the capacity to finance the turnaround of Proton’s finances. Proton has financial problems like other car companies. If they can’t, it will be bad for Proton,” he said.
At 4.30pm, Proton’s shares gained 21 sen to RM4.15, but DRB-Hicom lost two sen to RM2.10.
Dr Mahathir hoped Khazanah would sell its stake at a reasonable price.
“Proton needs financing. So, it must have some people who can inject money into Proton. If the price is too high, it will become difficult for the investors to turn the company around,” he said.
Dr Mahathir said Khazanah has no plans to sell its stake to foreign companies as Proton would lose its identity (as Malaysia’s national car), but the company is currently negotiating with General Motors Company for a potential car assembly.
“Proton needs to remain as the national car and strengthen its engineering capability,” he said.
Partnering with global car manufacturers was not the only solution to improve technology, he said.
“There are many other ways to acquire technology. Many established car manufacturers do outsourcing for design,” he added.