Chinese automaker buys stake in Malaysia's Proton

Chinese automaker buys stake in Malaysia's Proton

DRB-Hicom Bhd and Zhejiang Geely Holdings Group have inked a definitive agreement under which the latter will acquire a 49.9% stake in the national auto manufacturer for RM460.3mil.

Malaysia's national carmaker Proton is now partly owned by Chinese automaker Zhejiang Geely Holdings Group after the signing of a deal with DRB-Hicom yesterday.

The deal was valued at 460.3 million ringgit (108 million US dollars), including a cash injection of 170.3 million ringgit into Proton by Geely, and a sports utility vehicle platform that is worth 290 million ringgit, DRB-Hicom Managing Director Syed Faisal Albar told a press conference following the signing ceremony.

He said this at a press conference after the signing of the definitive agreement for Geely to take a 49.9 per cent equity in Proton Holdings Bhd worth RM460.3 million, here today. It has overseen an extensive refresh of the Volvo line-up, and also created Lynk & Co, an all-new automotive brand designed to sit between the Geely's own range of cars and Volvo. "I can not give you a definitive timeline now, but rest assured we have a good, solid plan that we will put in place soon, and we will announce it in more detail in due course".

"Proton's status as Malaysia's national vehicle is secure, and DRB-Hicom remains a majority shareholder", said Syed Faisal.

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Meanwhile, Geely chairman Li Shufu said the group's priority is to turnaround both Proton and Lotus. Geely's main goal with both Proton and Lotus is to ensure both brands are profitable and enjoy sustainable growth, objectives that will be achieved in part by embracing electrification and lightweighting technologies, along with artificial intelligence. "We will work together to make the most of our respective strengths".

But purchasing a controlling stake in British sports-car maker Lotus may be the biggest coup for Geely, which is known mainly for producing low-end cars in its home country. This became possible after the automaker was acquired by Chinese firm Geely, which owns Volvo.

"For over the last ten years, Geely has quietly but successfully emerged as a major player in the automotive market".

Prime Minister Najib Razak said Proton has been "hobbled by an out-of-date, inward looking and commercially unworkable idea of what constitutes success for a national carmaker".

"DRB-Hicom will also be repaying RM350 million of the government's RM1.5 billion soft loan due in 2023 in advance, to help with Proton's reorganisation", he said.

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