KUALA LUMPUR: DRB-Hicom Bhd
's loss-making Proton Holdings Bhd will raise RM250mil from the issuance of 250 million new redeemable convertible cumulative preference shares to a government-own entity.
DRB-Hicom said on Thursday Proton will issue the loan stocks of one sen each to GovCo Holdings Bhd, which is in addition to the issuance of 1.25 billion loan stocks earlier in June.
It said the Task Force and representatives of Proton Holdings had met on Aug 10. On Aug 16, the national car maker's representatives had issued a letter to the Ministry of Finance that the balance of the government's support would be through the issuance of the new 250 million Proton loan stocks.
Maybank Investment Bank was appointed as principal adviser to DRB-Hicom for the proposed loan stocks issuance.
On June 9, the government gave financial assistance to Proton amounting to RM1.5bil. It included the government subscribing for loan stocks amounting to RM1.25bil. As of March 31 last year, Proton’s total long-term borrowings stood at RM847mil.
The loan stocks are convertible with cumulative dividends of 4% per annum in the next five years.
In giving the financial assistance, International Trade and Industry Minister Datuk Seri Mustapa Mohamed had then said that the government wanted the money back in five years and told Proton to look for a strategic partner.