KUALA LUMPUR: DRB-HICOM Bhd gained as much as 11.7 per cent in early trade yesterday on reports that it was expecting up to seven bids to buy all or part of its shares in Proton Holdings Bhd.
The stock rose to a high of RM1.24, or 13 sen higher than Friday’s closing, in the morning session.
However, the gain was partially erased after group managing director Datuk Seri Syed Faisal Albar denied that DRB-HICOM would sell all its stake in the national carmaker.
He said reports that DRB-HICOM was expecting as many as seven bids for Proton by the middle of the month and that it might even sell as much as 100 per cent of Proton to foreign buyers were untrue.
DRB-HICOM later issued a statement to Bursa Malaysia denying the reports, as the stock retreated from the intra-day day high of RM1.24 to settle at RM1.16, a five sen gain over Friday’s close.
The Employees Provident Fund (EFP) was one of the main sellers, having disposed of five million DRB-HICOM shares in the morning. The EPF still owns 113.14 million shares, or a 5.85 per cent stake, in the group.
In its Bursa filing, DRB-HICOM said it remained highly committed to holding a substantial and strategic stake in Proton.
“We are confident of and are assisting Proton in its turnaround programme.”
DRB-HICOM noted that as part of the requirement of the RM1.5 billion loan granted by the government, Proton was undertaking a request for proposal (RFP) exercise to seek a partner that could provide a strategic, operational and cultural fit on a permanent basis with the intention to grow its automotive business.
“This exercise is expected to be completed in the first quarter of next year and its implementation is being overseen by the task force committee formed by the government to monitor the turnaround,” it said.
Mohamad Madani Sahari, a member of the committee, also brushed off the reports and said Proton should be given space to carry its due diligence as it had made progress in its turnaround programme.
“DRB-HICOM’s group managing director has been clear on its position regarding equity plans for Proton, and I have high confidence in its commitment to Proton’s transformation plan,” said Madani, who is also Malaysian Automotive Institute chief executive officer.
“This can be seen through the group’s holistic approach in improving its products, manufacturing, branding and after-sales processes. At this point in time, we should give space to Proton to carry out its due diligence as at the end of the day, Proton is a business that must be sustainable in the long run,” he told Business Times.
Business Times reported last month Geely Automobile Holdings, the owner of Swedish carmaker Volvo Cars Corp, had been identified as one of the global automotive companies which could end up as Proton’s strategic partner.
Geely is one of the few original equipment manufacturers that has expressed an interest to collaborate with Proton.