The Government will provide Proton Holdings Berhad (PHB) with RM1.25 billion worth of funding by subscribing to new redeemable convertible cumulative preference shares (RCCPS) in the carmaker. The funding should form part of a RM1.5 billion soft loan that was awarded to Proton back in April.
In a filing with Bursa Malaysia, DRB-Hicom said Proton had entered into a conditional agreement with Minister of Finance Incorporated’s 99.99% owned Govco Holdings. The move may result in the Government being Proton’s controlling shareholder again.
Under the terms of the agreement, Govco will subscribe to 1.25 billion new RCCPS by way of cash payment. Each share will have an issue price of RM1, comprising par value of one sen each and premium of 99 sen. Proton will use the funds to settle outstanding debts to its creditors, vendors and suppliers.
Should Govco convert the entire 1.25 billion RCCPS in Proton and the unpaid dividend declared for the RCCPS (totalling RM574 million) into 2.1 million new Proton shares at the end of the 15-year tenure, DRB-Hicom’s shareholdings in PHB will be diluted from 100% to about 20.72%, while Govco will hold about 79.28% in Proton.
“The proposed RCCPS issuance will enable PHB to regularise its cashflow and settle the long outstanding balance payable to the PHB group’s various local and international creditors, vendors and suppliers. This will also help rebuild the vendors/suppliers’ confidence in the PHB group,” as stated in the filing.
The subscription of the RCCPS is also subject to various conditions, chief among which is a restructuring plan that will be overseen by a task force led by Performance Management and Delivery Unit (Pemandu) CEO Datuk Seri Idris Jala. The task force will also be responsible for entailing an outline plan to relocate Proton’s Shah Alam production to Tanjung Malim (freeing the Shah Alam land for development), in addition to creating a strategic business expansion plan for domestic and international markets.
“PHB Group has been experiencing flagging vehicle sales in the recent years and this has affected PHB Group’s cashflow position. PHB Group plays a crucial role in the national automotive industry where there are about 12,000 workers directly under the PHB Group while approximately 50,000 are employed under the various vendor companies. In cognisance of this, the Government of Malaysia agreed to subscribe to the PHB RCCPS to provide financial support to PHB.”
In the event that Proton is unable to meet the aforementioned requirements after exercising its best efforts and endeavours, both parties will mutually discuss for alternative solutions or options towards achieving a similar objective.
On the other hand, should Proton’s turnaround plan prove to be successful, it has the option to convert partially or wholly any outstanding PHB RCCPS into PHB shares at any time after the five-year grace period. The conversion price listed in terms is 87 sen per PHB share arising from the conversion ratio of one PHB RCCPS to 1.152 new PHB share. Govco is not entitled to call for a conversion.
If you’d like to read the Bursa filing in full, it is provided below. Let us know your thoughts on the matter in the comments below.
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beribu ribu tahniah easy come easy go
Sack the designer!
The big question is this. Now, Government already got “investment” in Proton, they will sure order more cars for Government departments and ministries in order to boost Proton’s profits.
This indirectly means, Government cannot be neutral and they are still using LHDN money, our money to prop up failing Proton. At the end of the day, we are still paying for Proton and to keep it alive.
Some even said “Proton are a private independent company”… Proton excuses “never stop taking free moneys/funds until Rakyat bankrupts” !
Feels like Malaysia has many Billions to spend. Our country is rich.
Why not? Malaysians have been feeding Proton for 30 years and they will continue to buy Proton due to tax system by Tun M. Not such a bad policy to keep Proton alive, eh?
Back to square one. BN sell P1-> DRB gets Loan -> Spend Loan on DRB -> BN buys P1 -> Gomen becomes heavily in debt due to this bailout. Loser – Rakyat……Winner – Gomen Cronies and DRB lah….Rakyat is always the one getting fuchhhh inside out.
Proton is not a sincere company. They take our Rm1.5 billion but they never cut cost.
See the Board of Directors, have they taken a pay cut? not even one sen pay cut. In overseas, if your company is doing badly, BOD will volunteer a pay cut themselves.
In Malaysia, the DRB staff have all become BOD. Their gaji still the same. Still 6 figures per month (not per year) each!
Still got fancy company cars and still got drivers.
Bertaubatlah Proton. You ask money, but you yourself also need to cut cost
they will never ever get any paycut. they only give the poor staff of Proton pay cut and no incentives. all these DRB board directors and so called turn around specialists are sitting on board of all DRB companies and make more salaries there and also get high salaries in Proton with sero pay cut. now who wants to help people like this????
Can Proton be open and declare how much bonus the directors and CEO of Proton got this year?
Beg rakyat’s RM1.5 billion money but all directors still getting very very very very fat bonus.
How sincere is Proton?
Sext the designer
Hidden due to lowcomment rating. Click here to see.
Perodua is truly rakyat’s pride and joy.
Perodua always listen and give car what rakyat simply needs: affordable, quality & fuel economy car.
Perodua making profits half billion Ringgit is testament proof of successful business model from customers, jobs creations to vendors ecosystem without govt bailouts.
With impending launching of new Perodua Axia Sedan it’s the end of automotive nonsense as finally Perodua close the product gap from sedan to MPV market and finally control over 60% together with Toyota UMW.
Please respect rakyat’s choice of only mostly prefer reliable proven quality Perodua and Toyota cars.
So let us wait and booking the new Perodua Axia Sedan in huge order numbers to become the 2nd 1 million cars by Perodua after iconic legendary Myvi.
#1JutaAxiaSedan
#KipidapPerodua
#DongidapPerodua
Dun forget
#1JutaEarlyAfterlife
#No1SalesmanForNirvana
#ValueCoffinForWholeFamili
And dun forget, Gov getting prime real estate in Section 25. If this includes COSE as well, imagine the connectivity to KESAS for this integrated development! When P1 relocates and redevelop that land, RM1.5 Billion can be recoup easily.
Once fully built and sold, this cud well be worth 10 billion even! So not such a bad deal after all, eh bashers?
what a retarded comment. Typical john
John was right, WE “Should take pride of our products dignity”. Malaysia boleh Proton boleh PM Najib boleh AP system owners boleh!
What a retarded rebuttal. Lol!
No wonder Proton and BN cronies never “bankrupt” because Rakyat like you still helping help to monopoly the industry !!! AP system owners love your blind support!
What does P1 have to do with AP? Salah masuk topik kah, bro? Masih tidur?
The world knew AP system owners = BOD’s of P1 and DRB HICOM. Go read “real” history BN boy !
National pride my AS! Is a private syed mohktar company.
Proton has been under DRB for few years now.
It is a disgrace now DRB now Proton is getting FREE money. This sounds like another Perwaja Steel bailout.
Proton being under private hands of DRB, how come they were still getting money from the Government? Our money. DRB should bear the burden of owning Proton and not be sucking money from the Malaysian Government. I refer to the many instances of Proton getting money from the Malaysian Government and not just the recent RM1.5 billion.
It looks like Proton will be used by DRB to milk the Government for more money in the future once the RM1.5 billion is finished. It is unfair to the rakyat because DRB owner is Syed Mokhtar and he is Top 5 richest man in the country. He should be funding Proton directly from his pocket. After all Syed Mokhtar gets all the juicy contracts and he owns practically everything. He even owns Bernas which decides how much we pay for our rice! He also owns Puspakom which charges a hefty fee even for brand new cars coming out from factories needing Puspakom approval.
Proton should either close down after all, it is our money that is being used to bail Proton out. If Government did not have to pour RM1.5 billion into Proton, it can build more FREE Government hospitals and FREE Government schools for the rakyat.
Malaysia people like Proton. They have been buying it for 30 years. So support! support!
Proton should leave this country. If you follow together much better.
I feel humiliated not pride by having such national car and malaysian like you.
Bangang, whats does love to our country have anything to do with proton does not meet the expectation of end users? Sure it does give jobs to many people. But the fact that they have very poor management to manage the resource they get from the government is what making the people angry. The performance of the company is dropping. If u’r gonna give 1.5bill as investment there, it would be a very high risk gambling. If u are smart as u think, u should be concern about how proton wanna win back the heart of end users. Last but not least, it is seriously stupid to say u can always leave malaysia is u are not happy with it… Ahmad maslan betul la kau nih
Do a search on Burberry. The big boss took a pay cut of 75%.
“Burberry’s Christopher Bailey took 75% pay cut in 2015”. This year he received 1.9 million pounds, down from last year’s 7.5 million pounds.
Why can’t the Proton bosses also do the same?
Cause they don’t care bout their customer, they only care about the money they got
This is why you are not billionaire.
I think Proton is not productive and sustainable although it creates lots of jobs. Its market caters mostly for domestic use and not much for export. With so much money invested in Proton, it does not bring much benefit to the country in the long term unless they are able to change the whole world’s perception on its brand.
Lelong tanah = show big Profits..?
Recycle old trick from MAS kah?
Datuk Semi,
Why dont gomen load a Proton Hondana,load it with cash to the max……go around to every company and community that always ask for everlasting perlindungan like tokok John…and just unload bundles of cash?
Not enough ,just print some more.No need to come out with sob stories about 30,000 vendors and deadwood staff cannot celebrate coming festive seasons.
What they are doing is BROAD DAYLIGHT RIPOFF.It is taking the GST collections and offloading to a failed company.
Just pure madness.
Right, spin it off to a private (crony) entity, throw a lot of money at it, and then end up owning it again. Sounds like the Tajuddin Ramli/MAS episode all over again. Well, I guess if that scam was good enough for TDM, it’s must be good enough for the incumbent.
Can a salted fish swim again? Maybe a miracle will happen here.
Sell it off to China company!
Stop wasting duit rakyat!
Proton as a company is losing millions PER Day. Imagine, not per month, not per year but PER Day.
How can the tax payer sustain a company that is losing millions PER DAY?
Can you imagine losing RM3 to RM4 million per day?
this is a farking bailout!!!
Share swap is not a bailout.
A rose by any other name is still a rose.
QUOTE: Each share will have an issue price of RM1, comprising par value of one sen each and premium of 99 sen. Proton will use the funds to settle outstanding debts to its creditors, vendors and suppliers.
Government is buying shares of 1 sen value at a premium of 99 sen, AND ue the funds to pay creditors! That is the essence of a bailout. The company is bailed out of court action by creditors….
According to LGE, share buyout is not whole thing sell woh. Who to belip now?
wait a minute…. another 1.25billion???
It’s not a failed company yet keep asking bailouts!
Read it again.
read the sentence ” The funding should form part of a RM1.5 billion soft loan that was awarded to Proton back in April.”. Don’t be plain stupid la bro..sorok sikit bodoh u tu.
No. This is part of the 1.5B. The rest wud be from tax exempts or other relieves.
Learn to read bro.
How far can we move forward as a country when the finance savvy menteris cant see that this are all good money going to waste.
Just make Proton commercialized please, for god sake.
Recruit the real talent and elite to the team, not only management but also the engineering and design team.
No more maruah bangsa (you know what I mean), no more so called patriotic pride.
Bull shit i would say.
Crony pride got laa, duhhh.
Shameless
woi proton bila nak launch perdana? nak tunggu duit 1 bilion masuk baru nak launch? Dah takda duit nak sewa hall untuk launching dan bayar penari kah?
Comfirm by management this week and buy from me extra discount RM5k.
Another bailout, history repeating itself. Probably a chunk of money from the collected GST. So everyone invested.
Hey Proton takes the money and close shop la
There is no turnaround plan laid out for Proton. Does anyone really think that the next Perdana, Saga & Persona is going to be a knock-out in the markets locally and globally?
DRB-Hicom looks like they are going to strip Proton’s assets such as land in Shah Alam, to post temporary profits.
For Proton to be successful, it needs to have a good CAR gameplan, not shifting money here and there to save it from bankruptcy. It is a car company anyways.
Remember the MAS story? Real hard decisions need to be made. Proton does not have any directions now, just trying to stay afloat the Titanic.
Remember MAS. Even the german ceo quits.
i bet 80% of those who read this article understands a thing. Thier only keyword is Proton and 1.5b
Ok.all makaysian with driving licence,please go to your nearest proton distributor collect one proton car of your preference for free as it is already paid by our beloved goverment. The offer is while stock last. By looking the stocked up left over from even year 2012,should be enough for all. Remember to bring photostat ic and driving licence. Thank for clearing up the old stock for proton.
1. Penjimatan dari penurunan “subsidi” minyak akan kita salurkan ke pembangunan seperti hospital, sekolah, pengangkutan dan segala usaha mempertingkatkan taraf hidup rakyat.
2. GST telah selamatkan negara.
what the hell.. proton is a dead meat.. don’t give my tax money to them..
They should transfer Proton under 1MDB then.Arul Kanda will do his magic after that. Rationalisation.
DRB took over Proton at RM1.3bil only. This year alone this Proton took RM1.5b + now RM1.25b. What are they doing with so much money for such a small company?
Learn to read bro.. jgn nampak bodoh sgt
“The funding should form part of a RM1.5 billion soft loan that was awarded to Proton back in April”.
Still don’t change the fact the company is run by orang-orang bodoh.
Rm1.5b + RM1.25b = RM2.75b. I know where the RM2.6b came from, but the rest RM150m sure from GST meh..
The loan is to pay what proton owe to vendors, not for proton’s R&D or new products. Now vendor will have money, gov will have share and say in Proton, and will continue to enrich the same vendor.. the cycle will continue, unless BN voted out!
And they are still wondering why their cars don’t sell.
John you are in “DEEP” trouble but saying people leave Malaysia if they dont like proton. this is a democracy and people are free to talk. this is not political and it is a car debate and no one say bad things about gov.. if you are so much proton supporter then dont try to be rude here. I own four Proton cars but I dont agree with a private company being helped by gov. this is actually the loan because Proton could not get the loan so gov is giving money and taking shares as collateral. I guarantee it will become GLC again and DRB will be booted out. then Gov is free to sell it to a proper OEM. we will see…
John is just another a-dime-a-dozen bootlicker, with their usual chest-thumping “patriotism”.
These people themselves are like Proton, feeding off the taxpayers.
Well, thats not me. Thats my RBA clone hired by DAP to make me look bad. But hey. Imitation is the sincerest form of flattery, I guess Bcoz they cant rebut my logic so they have to smear my image.
For me personally, u buy what u feel is right according to priority. For cars, it shud be whats the safest that u can get within ur budget. So I say it shud be Picanto-> Iriz-> Preve-> Suprima-> City or Kias/Hyundais-> Sylphy-> New Perdana-> new civic-> Altis topup on topkek spec-> Camry Hybrid only-> Accord.
So in my selection is there any bias, bootlicking, chest-thumping, favouring, non-patriotic or patriotic bollocks that these bashers throw at me except that I dun condone moving coffins at all?
You’re so free post stupid comments in PT everyday? No need to work? Are you hired by BN? Go wag your tail to Najib instead of BS in here. May be he will throw you a bone
What car are you driving, dear john? Is it a moving coffin? Look into the mirror before criticizing others, ya?
Pls shutdown all the proton plant or sell to other big player. Let us have better quality reasonable price car. Why Malaysia Government want rakyat to suffer when everyone can afford and deserve better life. Can u..u…u…especially u Najis explain
By the look of it, the gomen is trying to clean up Proton’s account for foreign acquisition to spare DRB-HICOM from it since as we all know, DRB-HICOM is basically an investment arm of current ruling political party.
Better revise the title for this news. At first I thought P1 got another 1.25b until I read the article. Maybe change it to ‘1.25b out of 1.5b’?
You don’t need to sell rockets to decisively close proton. It was dr M’s bright idea but proton is not bright anymore. Throwing another few billions ringgit with failed NAP policy. The rakyats are paying inflated car prices due to taxes and what not. Crazy goons.
It was never a bright idea in the first place. Britain for eg quit the car biz in the 80’s.about the same time the not so bright but egoistically nationalistic idea was hatched Mini’s rolls royce’s are now german cars. Jags and land rovers are now indian owned. Rovers, gone to the chinese. Now after more than 30 years and billions down the drain and still dripping, there are still quite a few who still think it was a bright idea. Imagine if malaysia had invested that money into public tranportation then. We cud have the best way back in 1990. And at a much cheaper price too.
No we dont. Cuz Tun M dun belip in public transport as much as Najib did.
Neither do MY pipu wan to walk more than 500m to any public transport or see elevated tracks within 1 km of their home or opis.
It will be the same problem. We are re-nationalizing Proton. And then we are reversing back the policies of lowering car prices. And our road tax will shot up again and whatever else in terms of taxes just to maintain Proton. The management of Proton will be fooled into believing that the higher capitalisation comes foc and begins to spend even with Pemandu supervising. In fact Pemandu may just cause prices to go higher because they ‘just’ realise whats the problem with Proton.
The problem with Proton is it cannot break even. A car manufacturer requires significant volume OR significant price. And being Pemandu, Idris will only take the ‘short cut’. Poor Malaysians.
For as long as there are taxpayers this sort of nonsense will continue.
Shutting down the Shah Alam plant in the near future is the most sensible thing to do. It will be sad, but it’s a necessary sacrifice.
Proton can focus on maximising economies of scale at their Proton City/ Tanjung Malim plant and cash in on the land value of the old Shah Alam plant. The 31-year old old Shah Alam plant is probably starting to show its age now and it’s likely that the current equipment and tooling won’t be able to keep up with Proton’s newer manufacturing standards without expensive renovations. In fact, all of the newer Protons; the Prevé, Suprima S, Iriz and likely the BH Persona are being built at Proton City, it’s just the old BT Saga, Exora and upcoming Perdana which are being built at Shah Alam. I don’t know where the new Saga, Suzuki-based hatch and Suzuki-based MPV will be built, but we’ll see.
From a political standpoint, things will not be so straight-forward and predictable. Closing down a factory might be seen as a weakness, but others will understand that it’s the most sensible thing to do, if Proton wants to return to profitability.
Most of all, I’m just glad that Proton will not be totally sold off to some foreign company (partial sale might be fine)… as that would be the ‘easy solution’. But success never comes easy, Proton shouldn’t be discouraged by all these twists and turns, if they can just stay on track now, they’ll have more than a fighting chance later in 2018 or 2021.
There. Exhibit A – ignorant Malaysian. Don’t blame government, just blame our collective stupidity.
Please Proton be grateful for this “gift”. Built better reputation and please design prettier looking car!
Good money chasing bad money.
just shut down proton lar for the sake of people, keep on dumping billion, billion into this hopeless company for what…
Sekejap kawin, lepas tu cerai. Lepas tu kawin balik. Lepas tu jumpa kawan baru, cerai balik. Kawan baru dah takde duit, kawin balik dengan pasangan lama.
Macam PKR dan PAS. eh eh jangan cemburu ye!
Shah alam
Proton for sale again…I can’t remember how many times Proton have been “sold”..started as government owned company via HICOM..then got “privatised to DRB in late 90s..due to demise of TS Yahya it went back to government under Khazanah. Then it was “offloaded” again to DRB HICOM under TS Syed Mokhtar..and now back to government again..there was even rumors that Petronas indirectly owned Proton at one time…and all these times they never managed to solve the power window issues! I had opportunity recently to rent a one year old Iris and as usual the power window on driver’s side has problem..
A little information about Govco Holdings.
GOVCO HOLDINGS BERHAD
Registration No.: 899866-X Govco Holdings Berhad. It’s a (K)1 Unit under our Ministry of Finance. (K)1 is Unit DFI & Syarikat Penegang Pelaburan. GovCo Holdings is a Special Purpose Vehicle. 99.99% owned by MOF (according to HLIB Research). GovCo issues bonds with a 4.07-4.45% yield until 2018 & 2021, current outstanding bonds amounts to EUR4.5b. RM8.8b Islamic Medium Term notes guaranteed by the government of Malaysia (IMTNS) maturing at 2036.
The only publicly known board member is Tan Sri Dr Mohd Irwan Serigar Abdullah, Datuk Mat Noor Nawi
A little known fact of DRB-HICOM; DRB-HICOM Defence Technologies Sdn. Bhd. (DEFTEC) the company played an integral role in the development, manufacture and supply of armored and logistics vehicles for military and homeland security.
DRB-HICOM holding company is Etika Strategi Sdn Bhd. DRB-HICOM Berhad is an investment holding company. Their Board consists of multi-corporation directors, from auditing firms to Iskandar, Khazanah to Axiata. The list goes on.
In the shortest way of putting it. They are one giant family of minitsty/companies/GLC’s and P1 is just being taken from one place to another but still under the same roof (GOV). I shall leave these information in your hands and you can decide what to do with them.
As long as dun kolos DEFTECH. Our nations security & sovereignty wud be at risk.
Proton dan Gomen, berpisah tiada, tidak pernah dan tidak akan. Biarlah taxpayers kena screw.
cronies flex muscle openly looting $$ ..
Tapi masih guna ceo manager designer yg sama walapun rugi tiap tahun..Ceo manager sama= sama result
Simbol kegagalan Tun M. Period
1 sen par value @ 99 sen premium??!!!
WTF!!!
Idris Jala and his Pemandu ETP crap has failed yet again.
They should have chopped the cancer at its bud and stop the bleeding & leakages. This is just buying time and giving tongkat to the already worthless company. DRB must be laughing all the way to the bank as it now can offload Proton which has been dragging it down.
And once again we have bootlicker and imbicile like father John Bercukur who is celebrating this feat.
U ppl laa…all dowan buy potong…Honda Toyota everyday.