The disposal of Khazanah Nasional Bhd's shares in Proton Holdings Bhd was made after detailed assessment of all proposals, including from DRB-Hicom, Prime Minister Najib Abdul Razak says.

The selection of Proton's new owner was based mainly on price and development strategy for Proton, he said in a written reply to Hee Loy Sian (PKR-Petaling Jaya Selatan) in the Dewan Rakyat today.

"In evaluating the acquisition proposals received by Khazanah, DRB-Hicom submitted an acceptable price of RM5.50 per share, supported by evidence of funding sources.

najib speech 020412 02 "DRB-Hicom also submitted a development strategy for Proton that was in line with the National Automotive Policy (NAP) and that would contribute to the development of the national automotive sector," Najib said.

On Jan 16, DRB-Hicom sealed the sale and purchase agreement with Khazanah Nasional Bhd to acquire 42.74 percent of Proton's issued and paid-up share capital for RM1.291 billion.

Najib, who is also finance minister, said to ensure Proton cars could compete with domestic and foreign makes, the government through the NAP has outlined ways to raise the competitiveness of the country's automotive sector, including ensuring planned and structured development of the local automotive industry, besides enhancing its capacity and long-term competitiveness.

The government will also continue to provide a comprehensive grant and initiative package, including the Automotive Development Fund, Industrial Adjustment Fund and Soft Loan Scheme for Automation and Modernisation.

Cooperation with Japan to continue

The government will also continue its strategic cooperation with the country's main trading partners under the existing free trade agreements such as the Malaysia-Japan Economic Partnership Agreement through the Malaysia-Japan Automotive Cooperation Programme, a capacity-building programme for the local automotive industry, he said.

"Besides that, under the NAP review now being undertaken by the Ministry of International Trade and Industry, the focus will be on raising the quality and competitiveness of local automotive products, including Proton's.

"New measures to help enhance the company's quality management system, operations, business and capacity to reduce production costs, besides raising productivity and quality, will be implemented," he said.

The prime minister said the review would propose various comprehensive incentives, including raising the competitiveness of components and spare parts producers and thus also enhancing the competitiveness of local car makers and assemblers, including Proton.

"The government will ensure DRB-Hicom will continue to safeguard Proton as a national car project through creating value-added products, besides accelerating Proton's transformation plan through rationalisation and synergy in the development of components and spare parts producers, distributors, logistics and the like to enhance Proton's global competitiveness," Najib said.

- Bernama