Proton announced today to Bursa Malaysia the resignation of Khazanah-appointed chairman Datuk Seri Mohd Nadzmi Mohd Salleh, as per the terms and conditions set by the share sale and purchase agreement signed between DRB-HICOM and Khazanah Nasional Berhad earlier this year.
DRB-HICOM has yet to announce who will replace him – we expect this to be known in about two weeks time as revealed by Datuk Seri Khamil Jamil this week.
To shed some light onto the timeline of what has happened so far – DRB-HICOM started off with zero shares in Proton. When it entered into agreement with Khazanah Nasional to purchase its 42.74% stake in Proton, it also scooped up some shares on the public market which gave it an initial 7.27% stake.
An EGM was held this week and DRB-HICOM shareholers approved the purchase. The sale will now go ahead and with the initial share purchase combined with the Khazanah shares, DRB-HICOM will end up with 50.01% of Proton shares.
All of this also triggers a mandatory general offer, where DRB-HICOM will offer to buy up all remaining Proton shares on the market; DRB-HICOM would probably end up with more than 50.01% because of that. If the percentage of shares on the open market falls to under 25%, Bursa may require Proton to delist, unless convinced that there are sufficient shares on the open market to maintain a liquid market.
In a notice by Maybank Investment Bank to Proton’s board today, it was made known that if DRB-HICOM ends up with more than 75% of Proton shares, it does not intend to maintain listing status of Proton and thus will not take any special steps to address the public shareholding spread shortfall in order to keep Proton listed.
So as it stands, we might just end up with our national carmaker being a private company. If DRB-HICOM really wants to clean Proton up and turn it around, I suppose what better way for it to do so without constant questioning from public eyes.
