According to a news report from The Star, CIMB Equities Research has said that DRB-Hicom is looking for potential buyers of national carmaker Proton.
DRB-Hicom has thus far received seven bids from various car makers, including the PSA Peugeot Citroën group, Renault SA, Volkswagen, General Motors, Suzuki and Geely. According to one source, “As Proton had inked an MoU with Japan’s Suzuki in Jun 2015, we believe Suzuki could be a front runner.”
The whole process is expected to complete by the first quarter of next year, and DRB-Hicom is willing to dispose up to 100% of Proton.
Despite that, CIMB Research has mentioned that the sale of Proton does not mean that foreigners will be controlling Proton, as they mentioned that the government has the option to take up to 79.28% of Proton, if the government want to convert its redeemable convertible cumulative preference shares (RCCPS) that was given to Proton as part of the RM1.25 billion loan.
Furthermore, CIMB Research also added that plans to sell Proton to a foreign owner is not new, as prior to 2012, Volkswagen and the PSA Peugeot Citroën group was keen to take a stake in Proton. None of those deals went through.
“We are positively surprised by DRB’s willingness to dispose of its entire stake in Proton. We believe that, this time around, there is a higher chance that the sale of Proton to a foreign partner may succeed given the recent reorganisation in Proton’s top level management and its need for further equity injection,” it added.
Via: The Star