Proton completes RCCPS issuance to Govco

Proton Centre of Excellence Complex in Shah Alam.

KUALA LUMPUR: DRB-Hicom Bhd said on Tuesday that its unit Proton Holdings Bhd (PHB) has completed the proposed issuance of new PHB redeemable convertible cumulative preference shares (RCCPS) to Minister of Finance Inc’s 99.9% owned subsidiary Govco Holdings Bhd.

In a filing with Bursa Malaysia a day after announcing the proposed RCCPS issuance, the conglomerate said the subscription shares had been issued to Govco.

Under the proposal, the Government was to inject up to RM1.25bil into PHB by subscribing to these RCCPS. This would enable PHB to regularise its cashflow and settle the long outstanding balance payable to the group’s local and international creditors, vendors and suppliers.

DRB-Hicom shares closed 17 sen higher at RM1.03 on Tuesday in active trading with 19.888 million shares done. Just a week ago, the counter had ended the day’s trading at 80 sen, the lowest in nearly seven years, on the day DRB-Hicom announced its results for the financial year ended March 31, 2016 (FY16).

DRB-Hicom incurred a pre-tax loss of RM821.27mil in FY16 against a pre-tax profit of RM501.83mil in the previous year. The company attributed the losses largely to the poor performance of the Proton Holdings group with lower sales of motor vehicles amid stiff competition, volatility in foreign exchange rates and weak consumer sentiment.

“The group’s performance during the financial year excluding Proton’s results had been commendable,” it stated.

For the earlier story on the RCCPS, please see Govt to buy up to RM1.25bil preference shares in Proton