DRB-Hicom makes firm proposal to Cabinet committee on Proton takeover
DRB-Hicom Bhd has made a firm proposal to the Cabinet committee for automotive on the group's interest in acquiring a 32.9% stake in national carmaker, Proton Holdings Bhd.
DRB-Hicom representatives met the Cabinet committee, which was chaired by Deputy Prime Minister Datuk Seri Najib Razak and attended by Finance Ministry, International Trade and Industry Ministry and Transport Ministry officials last Monday.
“That was our first round (of meeting). We do not know when (the next is),” DRB-Hicom automotive division executive adviser Tan Sri Abdul Rahman Omar told a media briefing on Dec 15.
Asked how the Cabinet committee members had responded to the group's proposals, he said: "They kept quiet."
On DRB-Hicom's chances of securing the takeover of Proton, Abdul Rahman said: "I believe I have a chance, a 100% chance based on the explanations I gave."
"It is in the interest of the government to regroup so that DRB-Hicom can grow, Proton can grow and EON can grow," he added. Edaran Otomobil Nasional Bhd or EON is DRB-Hicom's associated company and Proton's super dealer.
Meanwhile, market talk has it that the government has identified the foreign partner that will take control of Proton's manufacturing operations and will seal the deal soon.
The proposed new business model at Proton is said to be akin to that of the second national carmaker, Perusahaan Otomobil Kedua Sdn Bhd (Perodua).
In 2001, Abdul Rahman, as Perodua's managing director, had spearheaded Perodua's restructuring that saw its Japanese partners taking over equity and management control of its manufacturing operations.
The question now is how any of the local players, which have expressed interest in participating in the restructuring of Proton, can fit into the overall scheme of things.
Abdul Rahman said DRB-Hicom was game in collaborating with a foreign partner to improve Proton’s performances and the auto industry as a whole.
“DRB-Hicom and a foreign player can play an effective role to assist Proton revive the local automotive industry.
“We have to drive Proton based on the foreign partner’s capability in moving forward. We can provide value to the foreign partner,” he said.
On whether the group had initiated talks with any of the foreign carmakers, Abdul Rahman said: “Our partner is General Motors. Renault has also been talking with us separately. Volkswagen is very close to me.”
He neither disclose the details of the talks nor the matters they pertained to.
On when the government may make a decision on the matter, Abdul Rahman said: “This is a public statement made by the Prime minister and Nor Mohamed Yakcop; by first quarter next year.”
Abdul Rahman said DRB-Hicom's proposed move to have the stake in Proton was vital for its survival as it depended heavily on Proton-related activities, be it manufacturing, components or after sales.
He said its automotive business had been affected due to the declining Proton sales over the years. He added that Proton sales had dropped faster compared to the industry’s sales.
“Over 60% (of DRB-Hicom's) revenue is Proton-related business. If somebody else takes over Proton what is going to happen to EON? What is going to happen to our component business? It is a business interest,” he said.
The substantial shareholders of Proton as at July 2006, are Khazanah Nasional Bhd (38.32%), Employees Provident Fund (10.93%) and Petroliam Nasional Bhd (6.5%).
DRB-Hicom’s substantial shareholders include Etika Strategi Sdn Bhd (15.5%), which is controlled by Tan Sri Syed Mokhtar Albukhary, EPF (16.3%) and Khazanah (10.38%).
“If we were to regroup (this shareholding in Proton), the government's interest can be maintained and strengthened through DRB-Hicom.
“If we are in the driving seat, and not Khazanah, we can filter through whatever is the interest of shareholders and the government’s. We have a better major role than Khazanah,” said Abdul Rahman.
He ventured to estimate that Proton would only turn around the earliest in two years after any restructuring or alliances were sealed.
Abdul Rahman said if the heavily automotive-centric group failed to secure the stake in Proton, DRB-Hicom would have to “crack heads and move to another area”.
“Traditionally 60% of our revenue will be going down the drain; we have to rescue this as we have the expertise and knowledge,” he said.
DRB-Hicom representatives met the Cabinet committee, which was chaired by Deputy Prime Minister Datuk Seri Najib Razak and attended by Finance Ministry, International Trade and Industry Ministry and Transport Ministry officials last Monday.
“That was our first round (of meeting). We do not know when (the next is),” DRB-Hicom automotive division executive adviser Tan Sri Abdul Rahman Omar told a media briefing on Dec 15.
Asked how the Cabinet committee members had responded to the group's proposals, he said: "They kept quiet."
On DRB-Hicom's chances of securing the takeover of Proton, Abdul Rahman said: "I believe I have a chance, a 100% chance based on the explanations I gave."
"It is in the interest of the government to regroup so that DRB-Hicom can grow, Proton can grow and EON can grow," he added. Edaran Otomobil Nasional Bhd or EON is DRB-Hicom's associated company and Proton's super dealer.
Meanwhile, market talk has it that the government has identified the foreign partner that will take control of Proton's manufacturing operations and will seal the deal soon.
The proposed new business model at Proton is said to be akin to that of the second national carmaker, Perusahaan Otomobil Kedua Sdn Bhd (Perodua).
In 2001, Abdul Rahman, as Perodua's managing director, had spearheaded Perodua's restructuring that saw its Japanese partners taking over equity and management control of its manufacturing operations.
The question now is how any of the local players, which have expressed interest in participating in the restructuring of Proton, can fit into the overall scheme of things.
Abdul Rahman said DRB-Hicom was game in collaborating with a foreign partner to improve Proton’s performances and the auto industry as a whole.
“DRB-Hicom and a foreign player can play an effective role to assist Proton revive the local automotive industry.
“We have to drive Proton based on the foreign partner’s capability in moving forward. We can provide value to the foreign partner,” he said.
On whether the group had initiated talks with any of the foreign carmakers, Abdul Rahman said: “Our partner is General Motors. Renault has also been talking with us separately. Volkswagen is very close to me.”
He neither disclose the details of the talks nor the matters they pertained to.
On when the government may make a decision on the matter, Abdul Rahman said: “This is a public statement made by the Prime minister and Nor Mohamed Yakcop; by first quarter next year.”
Abdul Rahman said DRB-Hicom's proposed move to have the stake in Proton was vital for its survival as it depended heavily on Proton-related activities, be it manufacturing, components or after sales.
He said its automotive business had been affected due to the declining Proton sales over the years. He added that Proton sales had dropped faster compared to the industry’s sales.
“Over 60% (of DRB-Hicom's) revenue is Proton-related business. If somebody else takes over Proton what is going to happen to EON? What is going to happen to our component business? It is a business interest,” he said.
The substantial shareholders of Proton as at July 2006, are Khazanah Nasional Bhd (38.32%), Employees Provident Fund (10.93%) and Petroliam Nasional Bhd (6.5%).
DRB-Hicom’s substantial shareholders include Etika Strategi Sdn Bhd (15.5%), which is controlled by Tan Sri Syed Mokhtar Albukhary, EPF (16.3%) and Khazanah (10.38%).
“If we were to regroup (this shareholding in Proton), the government's interest can be maintained and strengthened through DRB-Hicom.
“If we are in the driving seat, and not Khazanah, we can filter through whatever is the interest of shareholders and the government’s. We have a better major role than Khazanah,” said Abdul Rahman.
He ventured to estimate that Proton would only turn around the earliest in two years after any restructuring or alliances were sealed.
Abdul Rahman said if the heavily automotive-centric group failed to secure the stake in Proton, DRB-Hicom would have to “crack heads and move to another area”.
“Traditionally 60% of our revenue will be going down the drain; we have to rescue this as we have the expertise and knowledge,” he said.
posted by SEE FU at 11:13 AM
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