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PSA, Geely said to submit bids for stake in Malaysia's Proton
[HONG KONG] France's PSA Group and China's Zhejiang Geely Holding Group Co have submitted bids to buy a stake in money-losing Malaysian automaker Proton Holdings Bhd, according to people with knowledge of the matter.
Negotiations are still preliminary, with bids being evaluated and clarified, said one of the people, who asked not to be identified as the talks are private. The exact size of the stake to be sold will be determined after discussions, the person said.
A PSA spokesman said the company is "still in the negotiation process and wish to go further with Proton".
A representative for Geely declined to comment. A Proton spokesman didn't immediately return a phone call seeking comment.
Proton, which is controlled by Malaysian tycoon Syed Mokhtar Al-Bukhary's DRB-Hicom Bhd, is struggling from accumulated debts as sales slump. DRB-Hicom said in a Feb 15 statement that it will conclude and announce its decision on the foreign strategic partner within the first half of this year.
The automaker needs to bring in a foreign partner to help in research and development as part of conditions it agreed to in order to get a 1.25 billion-ringgit (S$397.138 million) loan last year. The manufacturer owns British sports car maker Lotus Cars Ltd.
For PSA, the bid for Proton comes at a time when it's also seeking to acquire General Motors Co's Opel and Vauxhall brands. As for Geely, buying a controlling stake in the Malaysian carmaker would give it control of both Proton and Lotus Cars, known for its lightweight chassis technology, following its purchase of Volvo Cars in 2010.
Proton also bought the engine technology in 2012 from state energy company Petroliam Nasional Bhd, which sponsors the Mercedes AMG Petronas Formula One racing team.
French daily Les Echos earlier reported PSA made a firm offer for Proton.