Inigo S. Roces / Proton | February 02, 2017 16:20
51% stake in Tanjung Malim plant eyed by Geely, PSA Group and Renault SA
Chinese car manufacturer, Geely Automobile Holdings, Ltd., is said to be leading the race to become the technical partner of Malaysian car manufacturer, Proton Holdings Bhd., said in a report by The Star, Malaysia.
This comes just five months after we reported last September that DRB-Hicom, parent company of Proton and Lotus, is apparently looking to sell a majority stake in Proton, along with Lotus.
Geely counts Volvo Cars and The London Taxi companies among its subsidiaries. Besides Geely, the publications reports that the PSA Group of France (parent company of Peugeot and Citroen), as well as Renault SA, have expressed interest in the company.
Geely and PSA, however, are most keen on acquiring a 51% stake in Proton's Tanjung Malim manufacturing plant, one of two manufacturing facilities that Proton controls. The publication said its sources saw Geely and PSA officials “actively undertaking due diligence work at Proton’s headquarters.” The same source went on to say, “between the two, Geely appears to show more interest.”
The Malaysian government has given the green light for the foreign companies to acquire a majority stake in the assembly plant. The Star went on to note that Proton’s Tanjung Malim plant was a prized asset for the European carmakers to gain access to the Southeast Asian market.
Last month, Proton CEO, Datuk Ahmad Fuaad Kenali, said the firm was expecting to announce its tie-up with a foreign strategic partner as early as April this year. The embatlled Malaysian automaker was granted a RM1.5bil (USD338M) soft loan by the government to pay its vendors. One of the conditions for receiving the loan was to collaborate with a well-known strategic partner to turn around its fortunes. While it is urgent for Proton to decide on its strategic partner, Ahmad Fuaad said it was also careful in evaluating and deciding the best proposal.
Proton began the process of identifying its strategic partner in June 2016 by sending out a request for proposal to 14 original equipment manufacturers (OEMs), among them Geely, PSA Group and Renault SA.