Govt approves RM1.5b soft loan for Proton

Kuala Lumpur: The government has approved Proton Holdings Bhd (Proton)'s application for a soft loan of RM1.5 billion which would help the national automotive company pay its vendors for components supplied.International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the government had also agreed to impose several conditions on Proton to revive its business which, among others, included seeking a strategic foreign partner.

"Proton must also come up with a turnaround plan, as well as a strategic plan to expand its domestic and international markets," he said in a statement.

In addition, the government will establish a special task force, to be led by Performance Management and Delivery Unit Chief Executive Datuk Seri Idris Jala, to overlook Proton's transformation plan and ensure it success.

Mustapa said the task force would be made up of six representatives with three each from the public and private sectors.

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The government sector would be represented by the Ministry of Finance, Ministry of International Trade and Industry and the Economic Planning Unit while those from the private sector would be identified later, he said.

Apart from ensuring the conditions of the soft loan is met by the company, the task force would also review Proton's previous business models, followed by recommendations to overcome any shortcomings that has been identified, said Mustapa.

The minister said the government was aware that the automotive industry was a strategic industry and that there were 12,000 workers directly employed under Proton while approximately 50,000 were working for vendor companies.

"Today's Cabinet decision is based on the interest of some 60,000 workers who rely directly on Proton's future," Mustapa added.

Proton was founded on May 7, 1983, as the sole national car company by the then Prime Minister Datuk Seri Dr Mahathir Mohamad.

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The government wholly-owned company launched its first model, Proton Saga, in July 1985 through a joint venture with Mitsubishi Motors.

As at end-2015, the company, which is now owned by a Malaysian conglomerate, DRB-HICOM Bhd, has a 17 per cent market share, trailing behind Perodua, Toyota and Honda. – Bernama

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