Proton raises $440 mn for Lotus turnaround

15th April 2011, Comments 0 comments

Malaysia's national carmaker Proton said Friday it had secured £270 million ($440 million) to fund a five-year turnaround at its loss-making British-based unit Group Lotus.

Proton Managing Director Syed Zainal Abidin Syed Mohamed Tahir said the loan will be provided by six banks led by Malaysia's CIMB Bank.

"The £270 million will primarily be used for product development," he told reporters, adding that "part of the loan will be used to upgrade the Lotus facilities in Norfolk" in England.

Under the five-year plant Group Lotus -- which Proton took control of in 1996 -- aims to almost boost production to 8,000 cars a year after 2013 by launching five new models.

The other lenders are top bank Maybank, Overseas-Chinese Banking Corporation, Export-Import Bank of Malaysia, Affin Bank and EON Bank.

Proton in June unveiled the five-year transformation blueprint for Lotus, including a new management team and plans to launch new models and boost production.

Group Lotus Chief Executive Officer Dany Bahar said with the new financing, the sports car maker will be able to introduce much needed new models to bolster sales.

The firm unveiled five new models in September -- Esprit, Elan, Elite, Elise and Eterne.

Bahar said the new Esprit was expected to be rolled out in March 2013 and hopes it will help Lotus break even in 2014.

He added that Lotus currently sells at least 3,000 units a year with two models.

Proton bought a controlling stake in the British sports and racing car maker in October 1996, but it has remained debt-ridden since then, although the Malaysian firm last year said it was committed to turning it around by 2015.

In a previous bid to restructure Lotus in 2007, Proton waived debts of up to £16.5 million (racked by up the British subsidiary under a recapitalisation exercise.

© 2011 AFP

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