Malaysian Government Sells 42.7% Proton Stake to DRB-Hicom

There’s been a lot of speculation these past few weeks about the future of Proton. The Malaysian carmaker, which also owns Lotus, was reportedly looking to sell the loss-making British sportscar maker to SAIC or Genii Capital, something that Lotus CEO, Danny Bahar, dismissed as a rumor.
Last week, Proton released an official statement saying that it was negotiating with General Motors about selling a stake in its Tanjuing Malim factory.
Its board of directors also confirmed that the company’s chariman, Datuk Mohd Nadzmi Mohd Salleh, was interested in buying the 42.7 percent stake held by the state-owned investment company Khazanah Nasional Bhd.
Eventually on Monday, January 16, Khazanah announced that it has sold its stake in Proton to DRB-Hicom, for 1.29 billion ringgit (US$410 million). Owned by billionaire Syed Mokhtar Al-Bukhary, DRB-Hicomh already assembles vehicles for Mercedes-Benz and VW in Malaysia.
“DRV-Hicom’s proposal demonstrated the company’s extensive involvement in the automotive sector and its network of strategi partnerships, both local and international”, read the statement released by Khazanah, according to BBC News.
Analysts have already predicted that Proton was bound to either find a partner or a new investor, since its share in the local market had almost halved, from 60 to 30 percent in the last five years due to strong competition.
Analysts, such as Ahmad Maghfur from OSK Research, believe that the deal will benefit Proton, which needed both a cash injection and an increase in its output capacity.
“It’s a fair deal”, Maghfur told the BBC. “It bodes well and will open new doors for Proton, and for DRB-Hicom it will mean short-term pain for long-term gain.”