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Struggling Proton Issues $63 Million in Loan Stocks
Malaysian holding company DRB-Hicom Bhd says its beleaguered car company, Proton Holdings, has issued 250 million ringgit ($63 million) in loan stocks to a government holding company to help pay creditors and suppliers.
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Malaysian holding company DRB-Hicom Bhd says its beleaguered car company, Proton Holdings, has issued 250 million ringgit ($63 million) in loan stocks to a government holding company to help pay creditors and suppliers.
Loan stocks are shares pledged as collateral for a loan. The Proton deal represents the final portion of the government’s pledge earlier this year to invest in Proton. The shares are being acquired at 1 ringgit each by the Malaysian finance ministry’s Govco Holdings unit.
Proton, which was acquired by DRB-Hicom in 2012, has been struggling for years with eroding market share and a reputation for poor quality. The current government bailout gives the company until next summer to find a strategic foreign partner.
Previous attempts to find saviors for the company have foundered over control of the enterprise. Proton was created in 1983 as a partnership project between the government and Mitsubishi Motors Corp. The carmaker's domestic market share over the past 30 years has declined from 70% to 15%.
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