Investors encourage Proton to sell Lotus

[NedaSay]

Except that Proton never got it right! They never really tried to get a serious foothold in Europe! If A big car manufacturer is to buy within 2/3 years I don't think it will be a major player! However I do see SAIC (MG) interested in a tie up!

Allow me to digress I just saw a small piece in Autocar with a picture of Hethel redeveloped with new (or refurbished) design, engine & motorsport buildings!!! Would anybody have that picture in high res?

Edited January 2, 2012 by NedaSay

[simonb]

I do wonder if the "lack of synergy" is in some way the fault of Lotus.

If the Campro were the best little 4 pot engine out there, and the Gen-2 the fun hot hatch to buy, then it would be great synergy; sadly the proton range remains uninspiring. I cannot see any disadvantage to a small car being "better than a Clio"

[a7esk]

Investment advice suggests Proton should get rid of Lotus

Recent chatter suggests Lotus could be looking for a new owner if the Malaysian government sells its stake in parent company Proton – and new hands at the tiller could spell disaster for Lotus’s ambitious model plans.

Two Kuala Lumpur investment analysts, Gan Eng Peng of HwangDBS Investment and Alexander Chia of RHB Capital, reckon that a new owner should divest itself of Lotus – which hasn’t made a profit in 15 years – ASAP. “Proton and Lotus are not a good fit,” Gan told Bloomberg. “They are in different market segments, both in terms of geography and product.”

Which, however accurate it may be, could be a bit of a problem for Lotus CEO Dany Bahar’s six-model resurrection plan for Lotus Cars. This envisages a return to profit by 2014, but relies upon the substantial funds currently supplied by Proton to make it happen.

Any new owner would thus need to be of sufficient size to provide Lotus with enough funds – believed to be around £500 million – to prevent a Saab-style meltdown. Thus far both Shanghai Automotive and Luxembourg-based Genii Capital (which also has a significant stake in the Lotus/Renault F1 team) have been mooted as possible buyers for Lotus, though neither firm has confirmed an interest.

http://www.pistonheads.com/lotus/default.asp?storyId=24950

Not good news for the work force.

Eddie.

[Iconic Ride]

"...and Luxembourg-based Genii Capital..."

Lotus of Luxembourg...........

Has kind of a nice ring to it, don't you think?

[Guest surferphil]

No, Proton never got it right and Lotus didn't help themselves either before the market crashed.

The point was that there are synergies with those two businesses, so the investment 'advice' is way off the mark, which doesn't surprise me as these public announcements are usually made with ulterior motives, it's a game called business.

The question is; what are the ulterior motives and who was paying the advisers to say that?

[Moxie]

Couldn't agree more. I think this is money guys playing manipulative games for reasons not obvious to us.

[Exploded]

http://paultan.org/2...uld-he-succeed/

How about the cash hungry subsidiary Group Lotus? “If I buy Proton, I will cut it off, and probably retain a 20 to 30% stake, which translates to a lot of savings every year. There is a lot of potential buyers for Lotus, and once a deal is signed it will be written back to the books of Proton,” he said.

Now that says enough I think. The current Proton Boss wants to get rid of Lotus. Genii is likely to take over, I was expecting this news. The word is on the street that Lopez already has a pre-agreement since a month ago.

In the Belgian Press, they already claim Lotus is (officially) for sale :http://www.autowerel...tus%20te%20koop

Edited January 5, 2012 by Exploded

[jkr]

some other facts........

http://www.thef1time...s/display/05228

Daimler no longer a shareholder in McLaren

a little picture of daimler's CEO:

[simonb]

But if Daimer jumped out of McLaren, because Daimler have their own F1 team, and McLaren road cars have no synergy, as they use their own bespoke engine; then what is of interest at Lotus?

[Guest surferphil]

Lotus need a partner to share the cost of producing their own cars.

Lotus bring the engineering, new engines V10 and V8.

Daimler welcome Lotus into premium market with the premium luxury components that Lotus have no experience in producing. They also bring money as Lotus have a lot to offer form their engineering.

The Diamler brand and Lotus Brand would be a good match as far as the customer is concerned and their products are are not in direct competition.

[Vulcan Grey]

Not to mention the rumor that the V8 for the Esprit is an HWA design...

[hedgerley]

And Wolf Zimmermann is ex AMG and no doubt maintains his contacts at his previous employer. You could speculate for hours with all the possible combinations, mostly coming up with 2+2=5.....

[Iconic Ride]

"Nose of Turk, and Tartar's lips...

Double, double toil and trouble;

Fire burn, and caldron bubble."

Dany's [half] Turkish and Mr Putin's Russian. Tell me The Bard wasn't on to something!

[jonwat]

Another Autocar report:

'Proton could sell Lotus' - Bahar

[simonb]

Could this have been the Bahar plan all along?

the new 5 car line up is much more attractive to a suitor than an Elise that is not road legal in the USA and an Evora that is selling slowly

[Gus82]

As Mr Bahar negotiated a shareholding in Lotus I assume that he is hoping to cash in once Lotus has been turned around. However I doubt it was in his plan to cash in at the moment unless necessary, the overall value of Lotus will remain low unless there is clear evidence that the turn around plan is succeeding and that won't happen until the new era cars are on sale etc.

I've heard a number of versions of this quote and a lot of flip flopping on the ownership issue since the new era reveal in Paris. Reading between the lines Lotus is for sale but only at the right price. If Proton needs a fast exit due to their own restructuring or ownership issues then I suspect Genii might buy a major share holding for a short period before finding a buyer or floating the company on the stock market.

[BrazierD]

Where would the big loan (£270M?) fit in a sale of Lotus? Presumably a buyer would have to take over the loan, and often in situations like that where a takeover target has large debts, the buyer pays little or nothing. But could Proton & the Malaysian Government really accept that politically after all the cash they had previously invested?

Could any buyer really take on the loan and pay a significant amount of cash? With the shares not quoted, it's hard to say what the value of company really is.

[Exploded]

Let Proton keep 30%, let Genii buy 31%, find investors for 39% to fill the bottomless Bahar pit with money...

[Gus82]

Proton is apparently in talks with GM and the Chairman is trying to buy out the state owned shares?

http://carscoop.blogspot.com/2012/01/malaysia-proton-owner-of-lotus.html

[Guest surferphil]

Those two letters spell Great Misery I fear.

[Exploded]

Have things started?

http://www.bbc.co.uk...siness-16571154

Malaysia's state-owned investment firm Khazanah has sold its stake in carmaker Proton in one of the biggest deals in the country's auto sector.

Khazanah offloaded its 42.7% stake in for 1.29bn ringgit ($410m; £269m) to DRB-Hicom.

DRB, owned by billionaire Syed Mokhtar Al-Bukhary, will have to make a mandatory offer for the remaining shares.

DRB already assembles vehicles for Volkswagen and Mercedes Benz.

"DRB-Hicom's proposal also demonstrated the company's extensive involvement in the automotive sector and its network of strategic partnerships, both local and international," Khazanah said in a statement.

"DRB-Hicom's proposed strategy and business plan provides an effective platform to enhance Proton's sustainability and meet its long-term growth needs."

'New doors'

The deal comes at a time when Proton has been struggling to keep hold of its dominance in Malaysia. It has seen its market share fall to 30% from more than 60% five years ago

The carmaker has been trying to tie up with various international manufacturers in the past few years in an attempt to regain its hold.

There have been talks of proposed tie-ups with Volkswagen and General Motors. However, none of those have materialised into a formal partnership.

Analysts said the deal with DRB, which has experience in the sector, will bode well for Proton, as the former was expected to inject cash and boost production numbers at Proton's plants.

"It's a fair deal. It bodes well and will open new doors for Proton," said Ahmad Maghfur of OSK Research.

"For DRB-Hicom, it will mean short-term pain for long-term gain."

'Strategic divestment'

The sale is the latest in a series of divestments that Khazanah has undertaken in recent years.

The investment firm has also offloaded its stake in Pos Malaysia Berhad and Time dotCom Berhad.

The company said it had been divesting controlling stakes in businesses that it sees as non-core and non-competitive assets.

Khazanah's managing director, Azman Haji Mokhtar, said the Proton deal was "another significant milestone in our strategic divestment programme as it represents the largest in size to date".

Mr Mokhtar added that the divestments were aimed at making government-linked companies become "stronger and more competitive".

Edited January 16, 2012 by Exploded

[Bibs]

From Joe...

http://joesaward.wordpress.com/2012/01/16/what-now-for-group-lotus-and-the-f1-team-that-bears-its-name/

and...

http://www.carsuk.net/lotus-not-for-sale-as-proton-sold-to-drb-hicom/

[Gus82]

The two year clause is interesting. I wonder if any portion of Lotus has changed hands already, as we know Mr Bahar has shares and there have been the Genii rumours? Of course the wording of any such contract could perhaps allow for shares to be sold but not a majority stake.

I think its probably good overall. Whilst the new owners may not be that keen in large long term investments it would seem likely that they would get the Esprit and Elite into production as they are nearly finished and should bring in profits, which will make it a lot easier to sell Lotus at a higher price when the two years are up. I just hope that Genii has taken a significant stake in the business to provide some long term stability.

Edited January 16, 2012 by Gus82

[Gus82]

The story about Proton has been added to the Autocar website, but with an interesting final line:

"Lotus expects to make an announcement on its future tomorrow."

Of course it could be that tomorrow they announce that there is no change etc. But alternatively other arrangements may already have been made.....

[Exploded]

Of course it could be that tomorrow they announce that there is no change etc. But alternatively other arrangements may already have been made.....

Welcome mr Lopez...