DRB-Hicom may sell Lotus

Billionaire Syed Mokhtar Al-Bukhary’s DRB-Hicom Bhd said it may sell
Lotus Group International Ltd if the unprofitable British sports-car
maker fails to meet performance targets.

Lotus should “work and
perform as what has been promised, or they have to face the
consequences,” Managing Director Mohd Khamil Jamil told reporters today
in Selangor, outside Kuala Lumpur. “We’ve got to see whether the
transformation plan that was initiated at Lotus in 2010 is fruitful.”

DRB
shareholders today approved plans to buy a controlling 43 per cent
stake in Proton Holdings Bhd, owner of Lotus, for RM1.29 billion from
Khazanah Nasional Bhd DRB, which had separately bought a 7.3 per cent
stake in the open market, is now required to make a general offer for
all the remaining shares.

Proton, which makes sedans and taxis,
hasn’t made any profit from Lotus since acquiring the sports-car maker
in 1996. The British manufacturer, which has struggled to compete
against Porsche AG and Ferrari SpA in Europe, has hung on to relevance
in the auto industry partly because of its decades-long expertise in
designing lightweight frames.





Shares of DRB have risen 30 per cent this year, outperforming the
benchmark FTSE Bursa Malaysia KLCI Index, which has gained 2.7 per cent
and Proton’s 13 per cent advance.

Selangor-based DRB will decide
whether to keep Lotus after a thorough evaluation, Mohd Khamil said DRB
makes, distributes and assembles vehicles from motorcycles to garbage
trucks for brands including Suzuki Motor Corp, Daimler AG’s
Mercedes-Benz and Yamaha Motor Co. DRB may consider selling a stake in
Lotus or the entire company, he said.

Other options include changing the management at Lotus or its business approach, Mohd Khamil said. -- Bloomberg