ZHEJIANG Geely Holding Group announced today that it has signed a final contract with DRB-HICOM of Malaysia, acquiring 49.9 percent shares of Malaysian automaker Proton and 51 percent shares of United Kingdom carmaker Lotus. "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".
Proton's stake in Lotus will be sold for 100 million pounds ($126.99 million) to Geely and a Malaysian firm, he said.
"Our partnership 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.
DRB-Hicom is hopeful that the production of Volvos, owned by Geely, and Boyue vehicles, would help Proton drive out of its financial losses.
He also said DRB-Hicom would ensure that Proton would settle the syndicated loan of RM533 million to Malaysian banks.More news: Deadly heatwaves will continue to rise, according to study
Malaysian Prime Minister Najib Razak stands on stage waiting for a signing ceremony between Proton and Geely in Kuala Lumpur, Malaysia, Friday, June 23, 2017.
"From the agreement, we are also looking at moving Proton's plant completely to Tanjung Malim", he said.
Geely chairman Li Shufu said the company's priority will be to turn around both Proton and Lotus and put them on a sustainable growth path.
Production of Lotus cars may have a future in China following the brand's acquisition by Chinese auto company Geely.
"The revival of Proton and Lotus will not be an easy task in a market with fierce competition".More news: CNN's Acosta Lashes Out Against WH Press Brief Recording Ban
Geely is the parent company of Volvo, where it has carried out a successful turnaround of the business since acquiring it in 2010.
"The government will also reimburse RM1.1 billion to Proton for the amount it had spent on R&D to produce new cars, " he said, adding that Proton had spent a total of RM3.5 billion in the past on R&D.
Malaysia wants Proton to win back lost market share and get a stronger foothold in the region's 3.2-million-car market.
On the RM1.5 billion soft loan given by the government in June past year, 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. The government will also supply the carmaker with the remaining 250 million ringgit of a 1.5 billion ringgit soft loan extended past year.More news: President Trump Admits: 'I Am Being Investigated for Firing the FBI Director'