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Malaysian assembler eyes 32% stake in Proton
Malaysian auto assembler DRB-HICOM Bhd has put in a bid to buy 32 percent of Proton Holdings Bhd in hopes that ownership of the national carmaker in the hands of the private sector would help improve the entire industry, reported the StarBiz newspaper.
Arguments put forward by sources close to the company are that vendors would gain from a more private sector-driven approach and that a potential tie-up between Volkswagen and Proton would also fit DRB-HICOM’s multi-partner business model, the local business paper said.
“If the Government holds control of Proton, it may lose out on the big picture,’’ a source was quoted as saying.
The big picture in question is the entire vehicle sector, which industry sources say has not flourished under the National Automotive Policy (NAP) like it was intended to.
Sources point out that vendors have performed poorly as many of them have been incurring losses. Also, established players in the country have opted for investments in Thailand over Malaysia citing the inconsistent policy here.
The Government is now on the verge of revealing its review of the NAP, which industry officials expect would overhaul the current structure, incentives and conditions for companies in the industry.
Proton is now engaged in talks with VW on a strategic partnership as DRB-HICOM and privately held Yasmin Holdings, together with the help of the Naza group and two former top executives of Proton, zero in on a controlling stake in Proton. The executives are Kisai Rahmat and Kamarulzaman Darus.
The fight for control of Proton could see the entrance of a third party – the company’s management – after Proton chairman Mohd Nadzmi gave his backing to any potential management buyout (MBO) of the national carmaker.
DRB-HICOM’s interest in Proton was sparked after the latter began talks with VW. To do so, it had requested DRB-HICOM to back away from its own ongoing discussions of a business tie-up with VW which started after Proton called off strategic partnership talks a few years ago.
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