It has been revealed that DRB-Hicom, owner of Lotus via its stake in national carmaker Proton, received an offer from a foreign company to take the loss making sportscar maker off its books for £1. The offer was rejected, according to a StarBiz report, and DRB-Hicom will stand by Lotus and nurse it back to health.
“The easy way out was to accept the offer. As a businessman, that was what I could have done to cut the loss, move on,” said DRB-Hicom group managing director Datuk Seri Mohd Khamil Jamil in London.
“But looking at the intrinsic value of Lotus, the knowledge, the iconic brand with global presence and positioning, coupled with unsurpassed engineering expertise and a talented workforce, its ability to cross function with Proton.
“We believe we have a business plan that will work for Lotus. If I sell without trying, at the end of the day, I will fail my shareholders,” added Mohd Khamil, who is also Proton’s executive chairman.
Failure is not an option. “The loan to Lotus is guaranteed by Proton. If Lotus is in trouble, the lenders will go to Proton. Looking at Proton, it is in no position to absorb the amount. Then, they will go to the grandfather, the ultimate holding company, which is DRB-Hicom. We have 53,000 staff with us and we cannot allow Lotus to take us down,” he added.
The loan in question is a £270 million syndicated loan extended by Maybank, CIMB, Oversea-Chinese Banking Corp Ltd, ExportImport Bank of Malaysia Bhd, Affin Bank Bhd and EON Bank Bhd at the end of 2010. Lotus had drawn some £207 million of that amount before the banks froze the remainder by July last year. The issue has now been resolved.
“We met the six bankers last month. I have made personal presentation on the revised plan that I have in the interim for Lotus. The bankers have taken them positively. They have decided to waive the condition subsequently and forgive Lotus and Proton. We are looking forward to a scheme with the bankers whereby we can draw down the balance of the loan. It will help part-finance financial requirements of Lotus,” Mohd Khamil told Bernama.
DRB-Hicom has also put its own man in charge of Lotus. Aslam Farikullah was appointed the chief operating officer of Lotus in June after former CEO Dany Bahar was sacked. Aslam, 51, worked as an engineer in the UK for 18 years before joining DRB in 2007. His most recent post was the division head of manufacturing and engineering at the conglomerate.
So Lotus has managed to escape the same fate as MV Agusta, the Italian motorcycle maker that was sold by Proton for one euro, for now. But guiding Lotus back into the black, helping it stand on its own two feet, and thrive from there is no easy task – if DRB-Hicom pulls it off, they would have achieved something that many have tried, and failed.