Hicom-Geely Holding partnership to drive Proton towards bright future: PM

Najib DRM Hicom Geely partnership will drive Proton to success

ZHEJIANG Geely Holding Group announced today that it has signed a final contract with DRB-HICOM of Malaysia, acquiring 49.9 percent shares of Malaysian automaker Proton and 51 percent shares of United Kingdom carmaker Lotus.

KUALA LUMPUR, June 23 Chinese automaker Zhejiang Geely Holding Group Co Ltd on Friday said it would help Malaysia's Proton strengthen its presence at home and across Southeast Asia, as it finalised its purchase of a significant stake in the struggling automaker.

The deal was valued at 460.3 million ringgit (108 million US dollars), including a cash injection of 170.3 million ringgit into Proton by Geely, and a sports utility vehicle platform that is worth 290 million ringgit, DRB-Hicom Managing Director Syed Faisal Albar told a press conference following the signing ceremony.

Li Shufu, chairman of Zhejiang Geely Holding Company, said: "As an iconic national brand, Proton epitomises the spirit of Malaysia".

The company agreed in May to buy 49.9 percent of Proton and 51 percent of British sports auto brand Lotus, which was owned by the Malaysian automaker.

"When they have turned profitable and have sustainable development plans and products, then they can plan to export", Li said, when asked if Proton would export to China. Most likely, the engineers of the British brand will work together with a Studio Polestar - Volvo factory tuner, which is developing the "charged" versions of models for the Swedish brand.

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Lotus is about as British as a cup of afternoon tea, but with new part-owners, the brand's cars may soon be built in China.

Geely is the parent company of Volvo, where it has carried out a successful turnaround of the business since acquiring it in 2010.

Taking a dig at former premier Mahathir Mohamad who started Proton as a national carmaker in 1983, Prime Minister Najib Razak said in a speech at the event: "The reality had dawned on nearly everyone; namely, that the (Proton) business model was, and had always been, unsustainable in the long run".

"We believe it will not take a long time because we have strong confidence in the growth of the Malaysian automotive market, and also in Proton", he said.

He also pointed out that, following the signing of the agreement, Proton will settle its RM533mil syndicated loan from a number of Malaysian banks. The government will also supply the carmaker with the remaining 250 million ringgit of a 1.5 billion ringgit soft loan extended previous year.

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