Geely aims for three-month completion of Proton and Lotus purchase

A Proton Tuah concept at the 2011 Hari Merdeka & Malaysia celebrations in Dataran Merdeka Kuala Lumpur

A Proton Tuah concept at the 2011 Hari Merdeka & Malaysia celebrations in Dataran Merdeka Kuala Lumpur

A definitive agreement will be signed by DRB-HICOM Berhad the maker of Proton and the Chinese buyer Zhejiang Geely Holding Group today morning. "I can not give you a definitive timeline now, but rest assured we have a good, solid plan that we will put in place soon, and we will announce it in more detail in due course". As a result, the deal also saw Geely adopt a 51 percent majority stake in Lotus, leaving the Chinese company in charge of the relatively small British manufacturer's operations. Our partnership with DRB-HICOM will enable Proton to become the industry leader in Malaysia and a top three brand in Southeast Asia. Its sales have suffered due to growing competition and a reputation for poor quality and bland models.

"But that is the people's money and it would have been irresponsible for us to continue with a business model that was never going to succeed", he said in his speech at the signing ceremony between DRB-Hicom and Geely Holding.

Prime Minister Datuk Seri Najib Tun Razak, who witnessed the signing, said the agreement cements a strategic partnership between the two companies.

Li Shufu was not able to provide a timeline for Proton's return to profitability when asked, but said that Geely would want the company to be back in the black as soon as possible.

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"The revival of Proton and Lotus will not be an easy task in a market with fierce competition".

"We will work together to make the most of our respective strengths to ensure a bright and sustainable future for both brands based on mutual respect and trust".

But he did not rule out the possibility that the production of Lotus will be brought to China, now the world's largest auto market.

Malaysia, he said, will also become the right hand-drive hub for Geely in this region, enabling the modern Tanjung Malim plant to be used to its maximum capacity, creating new jobs both locally and nationally.

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On the RM1.5 billion soft loan given by the government in June a year ago, Syed Faisal said, the government was expected to release the balance of RM250 million as the company had met the conditions set by the government's special task force with the signing of Geely as its strategic partner.

Najib said Proton had been in trouble, and the government was called upon to help the struggling firm with a soft loan, extended in 2016.

It has struggled in recent years and last year received 1.5 billion ringgit in government aid on the condition it pursues a turnaround plan and seeks a foreign partner.

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