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Malaysia’s state-owned Khazanah Nasional Bhd has sold its 43 percent stake in Proton, a maker of economy sedans and hatchbacks, to fellow Malaysian firm DRB-Hicom in a deal costing more than $410 million.
DRB-Hicom is a conglomerate dealing in automotive services, transport and power generation, and is currently owned by Malaysian billionaire Syed Mokhtar Al- Bukhary.
DRB-Hicom’s purchase of the controlling stake in Proton comes a month after Proton founder, former Malaysian Prime Minister Mahathir Mohamad, gave approval of DRB-Hicom’s bid, reports Bloomberg.
As part of the deal, DRB-Hicom now gains control of two Malaysian car plants with the capacity to build a combined 350,000 vehicles per year. More importantly, DRB-Hicom is also the new owner of Lotus through Proton’s ownership of the legendary British sports car brand.
What’s worrying now is whether DRB-Hicom will choose to kept Lotus afloat despite the company failing to post a profit since being taken over by Proton back in 1996. In a previous report, an equities investor suggested that all or part of Lotus would likely be sold if Proton were to fall in private hands.
One of the firms rumored to be interested in acquiring Lotus is Genii Capital, a part owner of the Lotus Renault GP team. There has also been interest from parties based in China. Note, Proton has also failed to make a profit in the last two years.
In related news, General Motors as recently as last month was in talks with Proton about forming a manufacturing venture in Malaysia for better access to the Southeast Asian market. It’s unclear what affect the latest sale to DRB-Hicom will have on those talks.
Stay tuned for an update.