The Malaysian state investment corporation, Khazanah Nasional, has announced that it will divest its 42.7 per cent share in Proton Holdings Berhad, a state-owned manufacturing company established in 1979 to evolve the country’s industrial interests.
The $410 million deal with privately-owned DRB-Hicom includes sportscar manufacturer Lotus, of which Proton is the parent company. DRB-Hicom is a car distributor and importer which builds Honda, Volkswagen and Mercedes-Benz models under license, and operates a total of eight factories. Four of those produce passenger vehicles.
It is believed DRB-Hicom, a company owned by Malaysian billionaire Syed Mokhtar Al-Bukhary, is interested in Proton’s volume passenger business. Proton’s two Malaysian factories have a potential combined output of 350,000 units annually.
Were this scenario to be played out, it is likely British marque Lotus, which has been operating in the red since being acquired by Proton from the bankrupt Romano Artioli in 1996, would be cut adrift.
Once-dominant Proton has lost 30 per cent of its domestic market share in the past five years as the country’s rising GDP and standard of living has seen buyers moving to imported Asian and European brands.
The deal, which is expected to be completed in Q2 of this year, could eventually see DRB-Hicom required to buy out the remainder of Proton’s shareholders, with Proton Holdings becoming a wholly owned subsidiary of DRB-Hicom.
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