DRB-Hicom plans tie-ups for Proton with strategic partners to boost its export markets

  • Business
  • Thursday, 19 Jan 2012

PETALING JAYA: DRB-Hicom Bhd will initiate partnerships between Proton Holdings Bhd and its foreign strategic partners to assist the national carmaker in its foray into the global market.

DRB-Hicom group managing director Datuk Seri Mohd Khamil Jamil said although Proton would still retain its status as a national carmaker, it would also be focusing on its export markets.

“There have been exploratory talks. There are a number of factors that we have to determine like who the right partner is, the products and the methods involved. This can only be done after we have completed the takeover,” he told a press conference here yesterday.

For Proton to move forward, he said its branding was important and the long-term plan would be for the national carmaker to be recognised in Asean and beyond.

DRB-Hicom also has the intention to take Proton private in a bid to improve efficiency, he added.

Khamil declined to elaborate on DRB-Hicom's plans, saying that it would be meeting with the current management of Proton soon to plan ahead.

“There is no point for me to go in and frustrate the plans that Proton currently has because it may have some brilliant plans. We can optimise the resources of both DRB-Hicom and Proton to make Proton better,” he said.

He said Proton should be a car manufacturer and not remain an assembler.

“Whom I work with and what area I would want to work in would depend on which is the best way to extract the best value for the company.

“My agenda is not only the company but the national automotive industry. If we do good with Proton, the local automotive industry would naturally perform well and it would transcend down to all levels of the automotive supply chain,” he said.

On the future of Proton's performance carmaker subsidiary, Lotus, he said the group was still open to options, and it would be needing some time to review Lotus.

“We need to talk to Lotus before deciding on the fate of Lotus. We need to find out what it is doing to move forward, and it would not be fair to Lotus by just assuming,” he said.

On how DRB-Hicom arrived at its offer price of RM5.50 per share for Proton, Khamil said it was based on public information.

“The offer price was arrived at after a very tedious process with my team and financial advisers. We have looked into the liabilities and assets of Proton,” he said.

Maybank Investment Bank is the financier for DRB-Hicom's acquisition of Proton, and it is expected to fund about 85% of the acquisition, while the remainder will be funded by internally generated funds.

“We will be arranging for term loans and bridging loans, which would be done in two tranches the first being short-term while the second is on a long-term basis,” he said.

He also dismissed speculation that DRB-Hicom intended to sell off its key assets like Bank Muamalat to fund the acquisition of Proton.

DRB chief operating officer Datuk Lukman Ibrahim said the group was looking at several upstream activities like vendors rationalisation, optimising the utilisation rate of Proton's Tanjung Malim plant and generating further cost savings via dealers rationalisation programmes.

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