Putrajaya in cash-for-shares deal with Proton

Kuala Lumpur

IN a few years, the Malaysian government could come full circle with carmaker Proton Holdings Bhd (PHB).

Under a conditional share subscription agreement, Putrajaya will inject RM1.25 billion (S$417 million) cash into the ailing car manufacturer - currently owned by conglomerate DRB-Hicom Bhd - to help tide it over because its cash flow has been so weak, and long outstanding sums owed to its creditors, vendors and suppliers have been unsettled.

In return, PHB will issue to the Minister of Finance (Incorporated)'s GovCo Holdings Bhd 1.25 billion new redeemable convertible cumulative preference shares (RCCPS) comprising par value of RM0.01 and premium…