Proton seeks US$768m funding to revive Lotus

Proton Holdings Bhd is in talks with CIMB Bank and several others to secure loans and investments totalling 2.35 billion ringgit (US$768 million) needed to turn around Group Lotus. Proton group managing director Datuk Syed Zainal Abidin said the bulk of the financing would come from bank loans while the rest from equity injection and advertising and promotion. “Group Lotus by itself cannot raise that kind of money and that is why Proton has to come in as the entire five-year turnaround exercise has to benefit the whole group. “We hope to sign an agreement for the loan within the next month as we are in talks with several banks including our own banker CIMB. “We are confident we can turn around Group Lotus as we have five new Lotus models that will start production by 2012,” he told Malaysian journalists visiting the Group Lotus headquarters as well as its factory here Tuesday (January 18). Also present at the press conference was Proton chairman Mohd Nadzmi Mohd Salleh and Group Lotus chief executive officer Dany Bahar. CIMB group chief executive officer Datuk Seri Nazir Tun Razak was also at the Group Lotus headquarters yesterday where Proton held its board meeting. To a question, Syed Zainal said Group Lotus would need to sell at least 8,000 units of the five new models annually before they could show profits. He said he was highly confident the company would be able to achieve it by 2014 as Group Lotus has assembled the “Real Madrid” of the automotive industry by hiring top executives from two highly acclaimed competitors. He said there was a lot more passion and urgency for revival to take place in the company. “Everyone here is very committed, excited and dedicated to see Group Lotus achieves its turnaround plan. “It is a do able plan. We have thought through this plan a hundred times and it is a challenge but realistic,” he said, adding that Group Lotus was on the right track and that public confidence was also high. Syed Zainal said that he was also confident that all companies under the group would be able to register a double-digit profit of between 20 and 30 per cent by the targeted turnaround date as there was still untapped market out there.