Positive charge: Geely seals Proton deal
kuala lumpur — Chinese billionaire Li Shufu said his Zhejiang Geely Holding Group will consider producing Lotus sports cars in China after agreeing to purchase stakes in Malaysian carmaker Proton Holdings and its British unit.
Geely signed a final deal to acquire 49.9 per cent of Proton and 51 per cent of Lotus Cars from Malaysia’s DRB-Hicom, and expects to complete the transaction in three months, the Chinese automaker said in a statement in Kuala Lumpur on Friday. It will then form a core management team recruited from a pool of global candidates to ensure the smooth operation of Proton, the company said.
Li said the priority will be to make Proton and Lotus profitable and to sustain growth while embracing new technology trends of electrification, vehicle lightweighting and artificial intelligence.
Geely, which bought Sweden’s Volvo Cars in 2010, said the acquisition will help the automaker to be a major player in Southeast Asia and achieve a sales target of three million units by 2020.
“The deep regional knowledge we gain from Proton and Lotus through this transformative partnership, coupled with our technological expertise and leadership in innovation, opens the door for Zhejiang Geely to become a major player in the Asean market,” Li said in the statement. “We will work together to make the most of our respective strengths.”
James Bond
Lotus, whose cars were featured in the James Bond movies The Spy Who Loved Me in 1977 and For Your Eyes Only in 1981, has floundered under Proton management since being acquired for 51 million pounds in 1996. In all of 2016, it sold just 339 cars in its home country, according to registration data from the Society of Motor Manufacturers and Traders in London.
Geely will own a majority stake in Lotus Cars, Etika Automotive will hold 49 per cent of the British carmaker. DRBHicom said last month that it’s selling Lotus for £100 million ($130 million) with each paying proportionately. Malaysian tycoon Syed Mokhtar AlBukhary controls both DRBHicom and Etika Automotive.
The Proton deal will include an investment of 170.3 million ringgit ($40 million) by Geely. In addition, the Chinese company will provide Proton with its Boyue sport utility vehicle platform, a transaction valued at 290 million ringgit, Syed Faisal Albar, group managing director of DRB-Hicom, said at Press conference in Kuala Lumpur.
DRB-Hicom will transfer Proton’s non-automotive assets, valued at 1.2 billion ringgit, to itself and these will then be pledged to the Malaysian government in lieu of the loans borrowed for Proton, said Albar. — Bloomberg