Group Lotus deal finalised by Chinese giant Geely

Geely acquires stake for RM460mil

Chinese carmaker, Zhejiang Geely Holding Group, has signed a final contract with DRB-Hicom Bhd, acquiring 49.9 per cent of the latter and 51 per cent stake in luxury sports vehicle brand Lotus.

Geely signed a final deal to acquire 49.9% of Proton and 51% of Lotus Cars from Malaysia's DRB-Hicom Bhd, and expects to complete the transaction in three months, the Chinese automaker said in a statement in Kuala Lumpur on Friday.

Of the sum, RM170.3 million is a cash injection while the remaining RM290 million comes from the valuation of Geely's popular SUV, Boyue, which it will produce in Malaysia using the Proton name.

"With the benefit of Geely's technology and expertise, Proton is now admirably prepared for the challenges ahead", he said at the signing of the definitive agreement between DRB-Hicom and Geely here today.

"With Geely making Proton their right hand-drive hub for the ASEAN region, Proton can now target the huge ASEAN passenger auto market for both our existing models and Geely's models".

Geely Chairman Li Shufu said: "Our partnership with DRB-Hicom will enable Proton to become the industry leader in Malaysia and a top three brand in Southeast Asia".

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Geely will also pay Proton £51 million (S$90 million) for a 51 per cent stake in British sports-car maker Lotus, he said.

"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.

It's still early days in Proton's partnership with Geely, but the latter already has a few rough ideas of what it has in store for the Malaysian carmaker. Most likely, the engineers of the British brand will work together with a Studio Polestar - Volvo factory tuner, which is developing the "charged" versions of models for the Swedish brand.

Malaysia would 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, he said.

DRB-Hicom Group managing director, Dato' Sri Syed Faisal Albar, said the signing was a historic moment for Proton, as the national carmaker moves to make inroads into the large ASEAN automotive market.

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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