Drb-Hicom 'seriously' Considering Options On Lotus

[Mark H]

DRB-HICOM BHD [] is "seriously" considering its options on sports car-maker Lotus, including disposing its stake, and will inform shareholders as soon as there is development on the matter.

 

"I assure you we are looking at it [Lotus] deeply and seriously... I've visited the company twice," DRB-Hicom chairman Datuk Syed Mohamad Syed Murtaza told shareholders present at the company's extraordinary general meeting (EGM) today.

 

He said this in response to a shareholder's question on whether DRB-Hicom is still looking at selling loss-making Lotus.

 

DRB-Hicom had said it was considering more asset disposals to pare the RM3 billion debt taken for the purchase of 100% of Proton in June this year.

 

The stake in Lotus came with its purchase of Proton.

 

At today's EGM, DRB-Hicom disinterested shareholders approved the sale of Hicom Power Sdn Bhd for RM575 million to a unit of MMC Corp Bhd's Malakoff Power Bhd, a related party transaction due to common substantial shareholder between the seller, DRB-Hicom, and the buyer, MMC. Both companies are controlled by businessman Tan Sri Syed Mokhtar Al-Bukhary.

 

Some minority shareholders who attended the EGM raised questions on why good assets like Hicom Power are being disposed by DRB-Hicom instead of loss-making Lotus. They also asked details on what else is being done to propel the group forward.

 

The EGM with a single resolution lasted for one hour and 40 minutes as the board allowed time for question and answer. Five minority shareholders voted against the resolution, which was ultimately carried by simple majority using a show of hands.

 

DRB-Hicom will enjoy RM37.3 million in interest savings from lowering borrowings by RM574.1 million using cash raised from the disposal, the company told shareholders.

 

The disposal cuts the Proton loan to about RM2.45 billion, a sum which DRB-Hicom intends to repay "from further asset disposals which are currently contemplated by the group and internal funds" taking into consideration repayment tenures between FY ending March 2014 and 2021, its circular to shareholders read.

 

About RM1.94 billion or 79% of outstanding proton loan is due from FY ending March 2016 onwards.

 

DRB-Hicom officials have reportedly said they intend to announce more details on its business plan for Proton by end of this month.

 

http://www.theedgemalaysia.com/business-news/225724-clarified-drb-hicom-seriously-considering-options-on-lotus.html