The government has set a timeframe of five years for Proton to complete its turnaround plan and has put a priority for the national carmaker to secure a strategic partner, according to The Star.
The English language daily quotes international trade and industry minister Datuk Seri Mustapa Mohamad as saying that the RM1.5 billion soft loan extended to Proton needs to be repaid with cumulative dividends of 4% per annum over the next five years. “It is therefore crucial for Proton to find a strategic partner and implement its turnaround plan that would be closely monitored by a task force,” he said.
Last week, the government completed the transfer of the cash assistance to Proton, which included the company issuing RM1.25 billion worth of redeemable convertible cumulative preference shares (RCCPS) – the government subscribed to these shares through GovCo Holdings.
Mustapa said that the government chose the preference shares route because it was the fastest way to address Proton’s financial problems, adding that a loan or a subordinated loan would have required consent from the company’s existing lenders.
The process would have taken a long time, further delaying the much-needed assistance that is required to solve Proton’s crisis with its vendors – it could also lead its lenders to request for the retirement of their loans. “The company is in dire need of liquidity to pay its vendors,” Mustapa said, adding that Proton’s total long-term borrowings stood at RM847 million as of March 31, 2015.
Despite this, Mustapa said that the current deal has its own punitive terms and features. The first of which entails that should Proton decide to convert the shares, the conversion rate would be set at 87 sen per share and the government would receive 87 sen per share. This is around 46% below Proton’s current net tangible asset of RM1.86 per share.
What’s more, a non-dilution clause has also been set to protect the government, should Proton secure dilutive financing under the 87 sen conversion rate. There will also be no dividend or shareholders advance being declared by the company as long as it still had RCCPS outstanding.
However, Mustapa made it clear that the government has no intention of turning Proton around nor take over its management, but instead wants to assist it in ensuring that the conditions imposed for the assistance are met. “The government has agreed to approve the soft loan of RM1.5bil to ensure that Proton remains sustainable as a national carmaker, providing jobs for 12,000 direct employees and another 50,000 employees along the local automotive supply chain,” he said.
As for a strategic partnership, Proton has had a long and rocky history in this regard – the company has held discussions with companies like Volkswagen and General Motors in the past, but nothing has resulted from those talks. The company was reportedly close to a deal with Volkswagen in 2007, but the Cabinet shot down those plans at the last minute.
After collaborations with Mitsubishi and Honda (the latter resulting in the upcoming Accord-based Perdana), Proton has now turned to Suzuki – both companies signed a memorandum of understanding (MoU) and licensing agreement last year. The long-term strategic collaboration and partnership plan will allow Proton access to Suzuki’s models, platforms, powertrain and automotive technology, while the Japanese carmaker will provide specific technical assistance for the selected products and scope.
Most recently, a report from The Edge speculated that Proton is currently discussing a potential tie-up with the PSA Group and Renault. The publication cited industry sources familiar with the matter as saying that discussions are ongoing with the automaker’s parent, DRB-Hicom.
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past 30+ years with Rm20+ billion still cant turn things around this monkey thinks he can turn around in 5 years with just Rm1 billion? Talk cock..
But P1 supporters love cronies to keep asking free money from go(Tax payers money).
Cronies job was so easy, need money just ask…
Actually in 2007, if VW had merged with Proton, Proton will be making millions. But unfortunately, cabinet shot down the decision.
here, we must analyse why cabinet shot down the decision. Our brilliant cabinet shot down the decision because the Germans did not agree to the 30% free shares tongkat policy ruling. The Germans were shocked. They have never heard of this tongkat policy. But our Ministers said that in Malaysia, whatever company you set up, you must give 30% shares FREE.
Mat Salleh said cannot lah like this. Then cabinet shot down the deal. Imagine if Proton was to rebadge VW cars, Proton will be worth billions today! Hidup tongkat policy!
You really know history well… Thanks for the info! Do the Utusan BN boys got something to say…
In other countries, its nice to be the king, in Malaysia, its fantastic to be the cronies. While Rakyat is suffering from low ringgit, budget cuts, increasing prices…..BN goes and loan 1.5B to its cronies……Gomen pegi mampus…
Cukurlah ada Proton, rakyat tak payah pakai bas. Be grateful, don’t be a foreign worshipper
Less than 3 years, Proton will ask another RM2bil. Mark my words!!!
We all knew Proton too well.
Kunci Kunta
Honda already launched new CIVIC.
Perodua ,launching TOYOTA powered sedan in July,next month.
So Proton’s Hondana,Saga,Persona facelifts all whacked kau kau by Honda and P2 by next month.
So what turnaround?
Ai yah….we meet one day ,have teh tarik with roti jala /curry better…what say u?
Imagine if Proton sold rebadged German cars, nobody will even bother buying any Japanese cars in Malaysia. Of course not the DSG units but the normal Auto Polos.
Everybody will buy this rebadged Polos cause we know we will be getting a full German car. this is the same principle why Perodua is doing well. People know they are getting a full Toyota Passo when they buy a Myvi.
bodoh Proton!
5 years should be enough for Proton to test the Accordana’s tail light and bodykit. Stay tuned for more spyshots the next 5 years.
In short. Is a bailout
Proton is technically bankrupt. Their existing models need major overhaul as it doesn’t appeal to buyers anymore. Proton needs to introduce models that are equivalent if not better than the other manufacturers while maintaining profit. I suggest to adopt what Perodua is doing, rebadging good Japanese or Korean cars and sell at affordable price. This is what Malaysians want. Malaysians have always love Japanese made car. It’s in our DNA and culture already. We don’t really trust other brands except Japanese.
nope, bolehland technically bankrupt the the hippo is transporting money and cash out by private jet..
if 5 years and proton still cannot turn around, what happen next? tutup kedai?
More bail out of course.
They will ask for another RM2bil before 2020. Mark my words!
Before 5yrs cycle, they will ask Mr gomen, please loan us 1.5bil for another turnaround. So now Malaysian are actually paying 12k+50k staffs salary. I just can’t understand the logic if demand is so bad, why still need to sustain 50k staffs supply chain? It should be half gone what. So dia orang duduk opis minum teh tarik, talk cock and sing song?
Can bet RM5 that the money lasts for 5 months max
Sell it off to China company!
Carlovers,
Don’t be fooled.The 1.5 B will never be repaid.It has gone to the crony vendor’s pockets.
If cannot pay,gomen can lelong their Shah alam and T.malim real estate.(LAST RESORT)
Now,it is BAILOUT AND BUYOUT= RM 2.75 BILLION.
Now ,into the 2nd month of bailout,
A.Still no job cuts
B.Still no new launching
C.Still as it is
The only new thing is Roti Jala.
Amazing…..Protong….recepient of Bolehland’s Everlasting Perlidungan Award 2015.
British Immigration officer asked Mat Sabu ” What happened to your country ? ”
Well, ” EVERLASTING PERLINDUNGAN” LAH.
As if in china USA jepunis korea dun have protektion
Proton is losing RM3 to RM4 million per day. That is PER DAY. Not per month, not per year but PER DAY.
You mean we got to wait for 5 years before we can find out? By then, another RM5 billion to RM6 billion of rakyat’s money down the drain.
Money which can be used to build more Government hospitals to give free healthcare to the poor and old.
Kunci Kunta
Build hospitals? It is a myth.
Build huge wardrobes to display birkin handbags and Jimmy Choo shoes for Imelda fatmama,lar.
12000 direct employees selling less than 100k cars per year, failed !!!!
I don’t want to sound cynical but this is not an issue of turning around PROTON but going round-and-round in a dead end.
Same thing happen after 5 years continue from AP owners keep as for R&D loans… AP system owners never stop asking “free” tax payers money!
you can give those clowns 50 years and they will still be braindead.
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. Like this, 5 years also, no way can turnaround!
AP system owners always helping Rakyat buy cheap cars… Proton Boleh, Malaysia Boleh, BN Boleh, PM Boleh, Hidup AP owners! STOP critic Proton
People already building Plug-In Hybrid in Malaysia but Proton still testing rebadge cars. You say fail or not?
Kw tengoklah kereta2 hybrid mat malaysia ni, prius, insight, tak lakukan..hybrid =rakyat malaysia kurang berminat
Oh Dear Tokok John
Today,you badge Proton,very surprising.
Yesterday,you bash Proton bashers.
Come on,don’t be a piece of jelly.
Be a man.A pondan has more dignity than u.
Why you replied to your own dupe?
Proton? With Camporn & CVT bising Punch Powertrain? Can’t go anywhere!
Toyota senyap? Boring car..sesuai urk warga emas
Then you’re saying senyap car like Tesla also for warga emas? Only make noise car like Proton baru ada gaya? Proton sesuai untuk anak kampung
CVT tak bising pun. Toyota tak senyap.
Di bawah Setiap perodua itu ialah model Toyota. Terlaris dari segi jualan. Maknanya tahun lepas Toyota jual hampir 100k kereta. Perodua hampir 200k. Jumlah keseluruhan hampir 300k, bersamaan hampir 50% jualan kereta baru utk thn lepas.
People here are all bodoh. Proton is our national pride. I am happy they got this loan.
If I was a billionaire, I will give Proton my own RM1.5 billion. It is a good company and it has given jobs to many people. Jangan jadi macam albert, kunta, george abdul etc la. All topkek.
Learn to love your own country. Not happy, you can always leave Malaysia
Sack the designer!
Why sack the designer?He just designed the cars.The final decision still lies with management.And if you think it’s easy to design a car,why don’t you show everyone here your talent in designing a car.Come on I know you can do it.I dare you but there are regulations to be adhered to.Details as follows:
Lenght not more than 4m
Width not more than 1.6m
Height not more than 1.5m
And also must include world standard safety requirements.
This a design for a small family hatchback.
Im not a car designer so i can’t design one.
Post your design here for everyone to see.tq
Make us believe again proton or face the nail for the next 5 years..taxpayers money are better spend for the people not for certain co parties,bring the turbo engine and convince us with the quality
BN ministry saying the same old statement, this last that last in the end keep feeding AP cronies “free money(tax payers money)”!
Proton has been sucking so much of money from the rakyat. Officially Mustapa said past 20 years, rakyat has given Proton RM15 billion FREE money. But I tell you, the figure is much more than that.
Don’t forget when Tun M was PM, he loved his baby (proton) so much. And with one hand he will take RM billions from Petronas and with the other hand, give that billions to Proton. All unofficially and out of the books. Ask any Petronas staff, they will tell you the same.
You ask me, Proton has makan over RM100 billion just to stay afloat. This money, we could have built at least 10 FREE Government hospitals and 10 FREE Government Schools in each state of the 13 states in Malaysia! (In total 130 extra hospitals and 130 extra schools)
Prove me
Geely (China) + Volvo (Sweden) + Proton (Bolehland) = Ultimate automotive group
Read: Proton given another 5 years to plunder.
hahaha.. best troll of a day
Its over my time to support proton. Now I only support Perodua if I were to buy Malaysia national car after so many years of experience and feedback.
Maybe Government should start to encourage and lure the young generation to start to support Proton. Get them to feel proud owning a Proton. Something has to be done on the branding of Proton. History of winning certain champion ship?
I believe that every year PROTON keep circled same story. Will turn into profit la…will be sales champion la…will be blablabla la…will be yada yada yada la…But all you can do is blaming others.
Please do us a favor Proton, close down your business if you are still making losses after this RM 1.5 billion bail out package.
That’s what they say about protectionism taxes as well. Oh we only tax imports for 5 years only. That 5 years was 25 years ago now
can they turn it around? even to make new model they need 7 years
Hidup Proton. Proton will suceed. Close shop? Tak close close pun lulz. Like i said, Proton close shop is just a dream. Ok next Proton 1.5 TurboGDi 180hp 250nm will sucess an next sales after this engine launch : 300,000unit
yeah, 300,000unit to gomen dept. only
..on the brink of the 5th year we will get this news..Govco buy another RM1.25b shares in Proton. Come on..we hear this before from MITI..remember those APs?
There are so many Malaysian taxpayers. Plenty of money from where it is coming from. So Proton need not worry or close shop. It can continue another 50 years.
Lets hope the soft loan doesn’t morph into a gift?
Proton haters in 3…2…1…
Macam Proton
Turn around?
Car turning circle also bad
Turn around?
5 yrs later will be given another 5 yrs and 2.5B loan… rinse and repeat.
I’m so happy I’m supporting this White Elephant with my tax…
Proton needs to realize that no one wants to buy their cars. Pack up and leave.
What will happen if fail to turnaround after 5 years?We will see.I think Proton is going to face very tough challenges ahead.Just wish them all the best.The first thing is please do not use the moniker “national car” or “national pride”
A car is still a car no matter what.It is a mode of transport.Most people just want good reliable cars at reasonable cost.Nothing to do with national pride.
Look at others countries with their so called national cars.What happened to them.Now everything is globalize.So it is nothing wrong to get partnership with other car makers.This is what other manufacturers do.You cant simply survive on your own.
Just my two cents.
No.
what’s next when fail after 5 years?? another 1.5bil again??!!!.. Gomen never intend to answer rakyat?!
Every 3 years 1 small turn, 10 years 1 big turn, so they end up in the same position when everyone is moving forward.
i still see young ppl driving new proton saga, why?
Simply because it’s cheaper (it cost half price of heavily discounted Vios), also i notice that quite many UMW Toyota salesperson buy new proton saga for their children nowadays (Toyota sales tak laku already, what makes me laugh is the salesman that bash Proton but buy Proton, especially saga for their children).
Might as well bring in more business to assemble cars for the international market instead of trying to float this sinking ship. At least people will still have jobs and taxpayers money won’t be wasted.
Proton? Perodua better la..
Put 0 after 5 years or evEn 00 after 5yrs n guaranteed that it wouldn’t v turn around
Y bez if there is no will there is no way
In less than 5 years, most cars manufacturer will be chucking out either Hybrid, Electricity and self-driving cars. Proton is too small in this car industry, like ikan bilis vs Whale.
The problem is ego, they don’t want to be sold to a bigger company like Australia’s Holden. They want to partner with a big player, expect them to transfer their technology and have a say on how they should run their business. Which is why so many partnership talks failed.
5 years… like all government promises. 5 years means infinite years.
Let’s make my comment in a time capsule and open it five years from now.
Come 2021, Proton will need another 1.5 billion, or even more? How about 3.0 billion for another bail out. Never ending story. Same bull crap, same script, different actors, running this stupid show for the past 30 years and no means to stop.
Shit!!! Another 5 years!
5 years?? I mean 2021 ?….skarang ini sudah 2016!!! . .please bangkit dari tidur and think what are malaysians want .
5 years…hmm what will happen? Changelh your design , this is 2016,2017 is just around the corner, this is not 2000 , designs still outdated , and after 5 years still use the old cvt…Why abg proton never show all these comments to the ceo? The malaysians work so hard to type all these comment…ubahlah persepsi masyarakat terhadap jenama ini dan jangan ulang kesilapan lalu…salam ikhlas sebelum berbuka puasa…
Old CVT? Even new civic has just started using it after city. And bolehland vios still using older 4 speeder trans.Duh.
Siapa kerajaan., siapa pulak rakyat., duit 1.5 bilion tu duit kerajaan ke duit rakyat.. Sebenarnya kerajaan ialah rakyat yg dilantik untuk memegang kuasa. Mereka2 inilah tamak, boros dan menyalahguna kuasa menghabiskan duit rakyat yg lain. Tak malu punya orang! Tunggulah masa kamu sudah hilang kuasa nanti…macam…
Now, proton is bankrupt of ideas, bankrupt of money and bankrupt of interest from buyers. They are very desperate and will promise almost anything to survive. Even the national coffers also they sapu.
Proton days are numbered and now creating bad karmas.
The ppl of Proton will have to payback for all the misdeed they done to Malaysian, in many generations to come….Mark my words….
The same captain same managers Same designer still sitting comfortly in the same office, so in five years same result
It’s always the mentality and attitude. The one on top not working hard enough to find solutions instead everyday go drink coffee and waiting for bail out. Sacked them and they learn to be responsible, and the rest of the people will follow. Look at the complaints at car forums, year after year still the same bad service and below par product given to consumer. When will they ever learn.
What if they cant turn it around in 5 years?
Would it then be shut down or another 5 years and another 5 years and another……..
Several suggestions proton need to heavily consider
1. Make cars that are good to drive but also make cars that people want to buy and own. The gen2 was engineered with only 1 cupholder and no glovebox. A very good lesson to proton.
2. To understand that the world is paying close attention to emission legislation. Scandinavia countries plan to ban sales of new petrol/diesel cars in 9 yrs time. What is proton’s plan? Where is saga reev?
3. Proton need to be super proactive in its marketing strategies. Keeping the same car design for too long is wrong. Example : preve – 4 yrs. Where is the facelift?
4. Have a proper showroom line up for every model. Why exora has bold model but preve doesn’t? Why there is no more R3 version for each specific model? Every model need to have SV spec, executive spec, R3 spec.
5. 2015 was a failure to proton, having its worst sales figures. For all that, all the management must take responsibilities. 10% salary cut. For GM and directors must cut another 20% to monthly allowances.
Don’t they know the company is struggling to survive??
just give the best you got.. Iriz Turbo, facelift and remake the interior for neo and plunk in the turbo.. bring the 4×4 concept..launch the mye01 engines lines.
Technically speaking of 5 years plan to prove themselves again after government funds injection, it’s a re-badge crap car again…
If p2 is so good, why dont copy their biz model? A JV with Suzy not a nice move since suzy sales here not so good and brand confidence is lesser amongst Japs brands here.