The selling of a 49.9% stake of Proton Holdings Bhd to a China-based company does not equate to a sell-out, said DRB-Hicom Bhd group managing director Datuk Seri Syed Faisal Albar.

The sale of the stake to Zhejiang Geely Holding Group Co should not be seen as that because Proton is a private entity, he said.

The acquisition of Proton by DRB-Hicom in 2012 from Khazanah Nasional Bhd, said Syed Faisal, was an “outright purchase”, and the “golden share” of the Government was removed then.

“Yes, Proton is the first national car brand by virtue of it being the first car marque that Malaysia produced back in 1985.

“By the same token, DRB-Hicom retaining 50.1% equity means that we still own the majority stake and the brand remains a national brand, a national car.

“But inviting Geely Holding to take up a 49.9% stake in Proton does not equate to us selling out,” said Syed Faisal in a recent question-and-answer session.

On Wednesday, DRB-Hicom said it had reached an agreement for the sale of the stake.

Both DRB-Hicom and Geely are expected to sign a definitive agreement in July.

Geely Holding, which already owns the Volvo brand and The London Taxi Company, would be expanding its reach into the South-East Asia region through Proton.

Syed Faisal said it took more than a year with “thorough analysis, site visits and detailed evaluation criteria” to look for a foreign strategic partner (FSP) that was best suited for Proton.

“In short, we needed to find a partner that understood what we wanted and what we needed, and was willing to take the journey with us towards our goals and aspirations.

“Pound for pound, Geely Holding was the best suitor,” he added.

Syed Faisal said Geely Holding made the best partner for Proton as the former has agreed to retain the national carmaker’s nameplate and aims to reclaim the number one spot in the country.

Syed Faisal said retaining the brand and wanting to be number one in the country were important considerations as Proton is a national car.

He said Geely Holding embraces the requirement, similarly to how it respected the Swedish aspiration when it bought over Volvo.

“In order to move fast into the market, part of the agreement is to inject a sports utility vehicle (SUV) platform into Proton and Geely Holding offered its best-selling SUV to us without batting an eyelid.

“This will enable Proton to enter a new segment, and a segment that has grown tremendously over the past years,” he added.

Other reasons include the commitment to grow Proton beyond Ma­­laysia, Proton becoming the right-hand drive manufacturing hub for Geely branded cars, Volvo cars being assembled at Proton’s Tanjung Malim plant, and Geely’s proven success in turnaround of auto companies, among others.

Source:
courtesy of THE STAR

by HEMANANTHANI SIVANANDAM

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