PONSB GETS RM1.1b R&D REIMBURSEMENT GRANT
Firm to use fund to settle RM525m loan facility and help Proton pay shareholders’ advance
DRB-HICOM Bhd’s wholly-owned Perusahaan Otomobil Nasional Sdn Bhd (PONSB) has received RM1.1 billion from the government as reimbursement for its research and development (R&D) activities.
In a filing with Bursa Malaysia yesterday, DRB-HICOM said PONSB would use the fund to fully settle its RM525 million syndicated loan facility and thereafter help Proton Holdings Bhd to partially pay shareholders’ advance due to the former.
In June, DRB-HICOM received a letter of approval from the Finance Ministry for the award of a reimbursement grant for R&D activities carried out by PONSB.
The group said this represented the culmination of an extensive application process by PONSB, dating back to August 19 2011 when it applied for reimbursement on R&D expenditure amounting to RM3.7 billion.
At the time of the application, PONSB and its holding company Proton had a different ultimate holding company and were not part of the DRB-HICOM group.
DRB-HICOM noted that the reimbursed fund would be used by PONSB to “de-leverage to the maximum extent possible by reducing its existing financial liabilities”.
“The de-leveraging process would enable both PONSB and Proton to be in a much stronger credit position to fund its future growth and expansion plans,” it added.
PONSB’s RM525 million syndicated loan comes with an estimated accrued interest of RM8.3 million.
The fund’s remaining balance of about RM566.7 million would help Proton partially settle and hence, reduce the amounts owing to DRB-HICOM.
The fund will also be used to repay any third-party lenders.
DRB-HICOM said the fund would be disbursed only upon completion of the definitive agreements relating to the entry
of a foreign strategic partner into Proton.
The group had in June signed a definitive agreement with Zhejiang Geely Holding Group Co Ltd, formalising the sale of a 49.9 per cent stake in Proton to the China-based carmaker.