Government to grant RM1.5bil soft loan to Proton

  • Nation
  • Friday, 08 Apr 2016

DRB-Hicom Bhd, which owns Proton, said in a filing with Bursa Malaysia that the latest proposed redeemable convertible cumulative preference shares (RCCPS) to be subscribed by Minister of Finance Inc

PETALING JAYA: The Government will grant Proton a RM1.5bil soft loan, which comes with several conditions attached to ensure the national carmaker is competitive, even at an international level.

"This loan is mainly to enable Proton to make payments to vendors that supply components to it," International Trade and Industry Minister Datuk Seri Mustapa Mohamed said in a statement.

The Government also agreed to impose several conditions in the restoration of the national carmaker.

Among the conditions is the need for Proton to "convince the Government" that its new business model is viable and competitive.

In particular, Proton has to create a turnaround plan to restructure the company and provide a strategic plan to expand its local and international market.

It also has to obtain notable foreign partners that will assist in leading research and development, and become a viable and competitive business at an international level.

A task force led by Pemandu CEO Datuk Seri Idris Jala will be established to ensure the success of this transformation programme.

The team will comprise three representatives from the private sector and three from the public sector, namely the Finance Ministry, the International Trade and Industry Ministry and the Economic Planning Unit.

Private sector representatives will be identified as soon as possible.

The task force will also examine Proton's past business model and devise strategies to overcome any weaknesses.

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