DRB-Hicom May Win Bid For Proton Stake, Says Dr M

(Bernama) — Conglomerate, DRB- Hicom Bhd, is likely to win the bid for Khazanah Nasional Bhd’s 42.7 per cent stake in Proton Holdings Bhd, given its sound financial and management capabilities, Proton adviser, Tun Dr Mahathir Mohamad, said Monday.

“DRB Hicom is quite well run. They also produce cars for Suzuki, Mercedes and Volkswagen. This company also belongs to the Al-Bukhary Group, which has a lot of other businesses, including port operations.

“They seem to be able to do business,” the former prime minister said in an interview with Bernama and Bloomberg.

Besides DRB-Hicom, Proton’s major shareholder, Khazanah Nasional, had approached Naza Group of Companies, Sime Darby Bhd and several other local companies to buy the stake, he said.

Sime Darby rejected the offer, said Dr Mahathir, who is also Proton founder.

Dr Mahathir said Naza has come up with a proposal and appears to be interested.

Dr Mahathir said he was not backing any company and it was up to Khazanah, the government’s investment arm, to decide (on the successful bidder).

“The buyer must have the capacity to finance the turnaround of Proton’s finances. Proton has financial problems like other car companies. If they can’t, it will be bad for Proton,” he said.

At 4.30pm, Proton’s shares gained 21 sen to RM4.15, but DRB-Hicom lost two sen to RM2.10.

Dr Mahathir hoped Khazanah would sell its stake at a reasonable price.

“Proton needs financing. So, it must have some people who can inject money into Proton. If the price is too high, it will become difficult for the investors to turn the company around,” he said.

Dr Mahathir said Khazanah has no plans to sell its stake to foreign companies as Proton would lose its identity (as Malaysia’s national car), but the company is currently negotiating with General Motors Company for a potential car assembly.

“Proton needs to remain as the national car and strengthen its engineering capability,” he said.

Partnering with global car manufacturers was not the only solution to improve technology, he said.

“There are many other ways to acquire technology. Many established car manufacturers do outsourcing for design,” he added.