Khazanah selling Proton stake to DRB-HICOM

by **hlk** Mon 12 Dec 2011, 08:32

LANGKAWI: Khazanah Nasional Bhd is selling its 42.7% stake in Proton Holdings Bhd to DRB-HICOM Bhd.
Proton adviser Tun Dr Mahathir Mohamad
said that Khazanah was selling because it was not pumping more money
into Proton, which needed funds for research and development work on new
products such as hybrid cars.
“I worry about the buyer
(DRB-HICOM) having enough money to inject into Proton. The shares it
will be buying are above market price, which will make profitability
difficult,” Dr Mahathir said after delivering a speech at the MIDF
Investment Forum organised by MIDF Amanah Investment Bank Bhd.
“But
I believe in DRB-HICOM's ca-pabilities,” he said, adding that the
status of Proton as a national car would remain after the sale.
[You must be registered and logged in to see this image.] File picture of Mahathir speaking at a recent UMNO function. - Bernama
On whether DRB-HICOM would sell its stake to Volkswagen AG, Dr Mahathir said he did not think so.
“DRB-HICOM only has a collaboration agreement with Volkswagen to locally assemble VW cars in Pekan, Pahang,” he said.
It has been reported that Khazanah had approached Sime Darby Motors, the Naza Group, Hyundai-Berjaya Sdn Bhd, DRB-HICOM and UMW Holdings Bhd.
So far, only DRB-HICOM had expressed interest in Khazanah's proposal.
Last
week, DRB-HICOM issued a statement to the stock exchange denying any
knowledge of a bid for Proton and of plans to sell a stake in Proton to
Volkswagen.
Last Friday, Proton's share price put on 89 sen, or
24.6%, to close at RM4.50, amid talk that its largest shareholder,
Khazanah, was divesting its stake in the national carmaker.
It
was reported last week, quoting people who were invited to participate
in the bidding process, that Khazanah would decide this month on selling
its stake in Proton.
Proton, which owns sports car maker Lotus Group International Ltd, has been on the lookout for a strategic partner to help compete with bigger global carmakers such as Toyota Motor Corp, Volkswagen and Honda Motor Co.