Malaysia’s Proton Holdings is in talks with a UK and domestic banks to raise GBP480m (US$768m) to invest in a new programme of expansion at Group Lotus, its UK sports car subsidiary.
Most of the funds raised will be in the form of bank loans, with some equity expansion also expected. Proton’s managing director, Datuk Syed Zainal Abidin, told reporters that Group Lotus on its own would not be in a position to raise the necessary finance.
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“We are confident we can turn around the company and we have a programme of five new models to go into production from 2012”, said Syed Zainal. “We will need to produce around 8,000 units per year of the new models to break even”.
Syed Zainal is confident of achieving this target by 2014, though he admits it is a challenge. The company has recently recruited a number of key, high-quality executives from rival manufacturers. An earnings target of 20-30% has been set for all companies within the group from 2014.
