There has been renewed interest in Proton, with talks of state controlled investment arm Khazanah Nasioanl looking to hive off its 4274% stake in Proton very soon.
The names surfaced as possible acquirers of the company are DRBHicom, Naza group and the Mofaz group. Other names that are being bandied about include the Sapura Group and two high net worth individuals, one linked to prominent business group and another who is based mainly in the UK.
However all the above mentioned companies have denied being interested in Proton.
There has also been talk of potential management buyout at the auto player, but this remains unsubstantiated. Financing for such effort could be an issue, but the prospect cannot be ruled out completely.
The renewed interest in Proton is induced by its depressed stock valuations as its earnings come under pressure from the massive capital investments in Lotus Group International Ltd.
How Khazanah reacts to new offers, however, remains to be seen. Khazanah will be gald to be rid of Proton even if valuations are low. The fund does not have any board representation.
As at end June 2011, its net assets per share stood at rm9.86, more than 3 ½ times its trading price, which was depressed following the weak financial results.
Proton says the financials were adversely impacted by higher expenses incurred at its Lotus unit. A at end June 2011, Proton had cash, bank balances and deposits of rm1.41 billion, while on the other side of the balance sheet, the company’s long term debt commitments stood at rm668 million and its current liabilities were rm96.14 million. Proton’s cash flow from operation activities was a mere rm4.77 million, compared with rm139 million in the corresponding period a year ago.
While there is no certainty that Khazanah will divest Proton anytime soon, market talk has intensified.
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