DRB-HICOM, Proton lifeline for Lotus (1619)

DIRE STRAITS: Troubled British sportscar maker needs £100m by next March to stay afloat

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Proton Holdings Bhd may have to pump in another STG100 million (RM491
million) in troubled British sportscar maker Group Lotus plc in order
to keep it afloat.

The money will have to be pumped in by March 2013, said DRB-HICOM Bhd managing director Datuk Seri Mohd Khamil Jamil.

Proton has pumped in STG100 million into Lotus so far this year after
several banks cut their credit lines to the sportscar maker.

"Lotus' cash flow is very bad right now. Proton is funding the cash
flow but I think there is light at the end of the tunnel," said Mohd
Khamil after a media briefing on Lotus here recently.


Mohd Khamil, who is also the chairman of Proton and
Lotus, said Lotus was being funded via internally generated funds from
Proton and DRB-HICOM.

He also confirmed a Business Times report early this week that Proton
had submitted a revised plan to the national carmaker's six big lenders.

"I have made a personal presentation to the bankers and we are looking to work out a solution where we can draw down the loan.
"Between now and December, they (the bankers) will decide," said Mohd Khamil.

Lotus has already drawn down more than STG200 million before the banks
stopped the remaining STG62.5 million to be disbursed to Lotus, a move
that could push the Hethel, Norfolk-based sportscar maker into
technical insolvency.

"If Lotus fails, DRB-HICOM will fail. The
problem is not here in Hethel. The problem will be in Shah Alam as
Proton has given the guarantees (for the loan)," said Mohd Khamil.

Lotus obtained some RM1.3 billion in long-term facilities in April 2011 to help turn it around.

The money was to be used as part of a RM2.4 billion turnaround plan, which was announced a year earlier.

The turnaround plan was centered on Lotus coming up with five new sportscars within five years for the mass market.

Mohd Khamil said the five-year plan was history.
"The five-year five-model plan was aborted by the previous management.
We are in the midst of revising (new) plans for Lotus," he added.

Asked if Lotus could return to the black by 2014, Mohd Khamil said it
could be sooner or later but that the immediate aim for next three
years was to keep Lotus in the positive in terms of cost, quality and
delivery.