DRB-HICOM to take back Proton’s non-automotive assets worth RM1.2b

KUALA LUMPUR: DRB-HICOM Bhd will take back non-automotive assets in Proton Holdings Bhd, worth at least RM1.2 billion, to be collateral for the government’s soft loan to the national carmaker.

Its group managing director Datuk Seri Syed Faisal Albar said the assets included land in Shah Alam, Selangor, after the Proton plant was relocated to Tanjung Malim in Perak, following the definitive agreement between DRB-HICOM and Zhejiang Geely Holding Group in Kuala Lumpur yesterday.

The move will ensure government’s protection in case of a default by Proton the soft loan valued at RM1.5 billion, he said yesterday .

“The government wants the security of the land and other assets (instead of the conversion right), so that the government is protected on the RM1.5 billion soft loan,” Syed Faisal said at a press conference, here, yesterday.

Last year, the government approved and granted the soft loan in the form of redeemable convertible cumulative preference shares (RCCPS) to Proton, bulk of which would be used to pay Proton’s vendors but with a number of conditions.

If Proton failed to service the loan, the government had the right to convert the RCCPS into Proton’s shares.

Syed Faisal said DRBHICOM will take over the first tranche of RCCPS worth RM300 million from Proton, which will reduce the loan amount to RM1.2 billion, equivalent to the value of Proton’s non-automotive assets transferred into DRBHICOM’s balance sheet.

This is in line with its objective of clearing Proton’s balance sheet to start afresh, he added. Proton will also repay some RM533 million worth of syndicated loans to local banks and RM567 million worth of shareholders’ advances owing to DRB-HICOM. Amir Hisyam Rasid

The government wants the security of land and other assets (instead of the conversion right), so that the government is protected on the RM1.5 billion soft loan. DATUK SERI SYED FAISAL ALBAR DRB-HICOM Bhd, group managing director