Tuesday, December 13, 2011

Dr M: Buyer of Khazanah's Proton stake may have to inject RM2b

KUALA LUMPUR (Dec 13): PROTON HOLDINGS BHD []'s adviser, Tun Dr Mahathir Mohamad said the buyer of Khazanah Nasional Bhd's 42.7% stake in the national car maker might have to inject maybe another RM2 billion more.

He said on Tuesday, it was his hope to see the company with the biggest amount of money to buy the stake which Khazanah had planned to sell.

"At the moment, Proton cannot make progress, introduce new vehicles and all that, because of shortage of funds," he said at a press conference after officiating the launch of Sahara Run Gold Dinar here on Tuesday.

Dr Mahathir said that Khazanah should make a decision because the shares belonged to the company.

"I heard it (Khazanah) wants to sell but has not made an announcement. It can be good, depends on who is taking over and how much they are paying," he added.

Dr Mahathir's worry is that if the price of the shares are too high, turning around the company may become difficult.

"Like everything else, if the capital cost is very high, it's very difficult to make a profit," he said.

Dr Mahathir said his concern was for Proton to be well managed and be a successful company, adding that he will not "make any money from that."

He also said that the buyer of the stake will have to make a general offer (GO) if it buys more than 30% equity interest.

"I understand that Khazanah has 42% to sell, so whether DRB-Hicom or whoever, the buyer has to make a GO for the rest of the shares," he said.

Asked his opinion on a GO for Proton, he said that he was "not okay with it", adding that it was not because the buyer would be taking Proton away but because the cost will be very high and that would make turning it around very difficult.

"The buyer will have to inject more money into Proton, maybe another RM2 billion more," he explained.

Therefore, the company that buys the stake must be financially strong and know how to manage or it may result in the company losing and that will hurt Proton.

"I don't want Proton to be hurt, I don't care if others are hurt, but not Proton," he added. - Bernama

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