Proton now Privately Owned, Lotus's Future in Question

A few weeks ago we ran a post discussing what would happen to Lotus if its parent company Proton was privitaized and sold. Well, the future is now. Malaysian billionaire Syed Mokhtar has purchased a controlling stake Proton for $410 million.

Mokhtar will buy 43% of Proton from the state-owned Khazanah Nasional Bhd. Mokhtar seems to actually want to invest in the company. His purchase price is 24 times the company's expected profit in the next fiscal year. The sale of Proton is part of the Malaysian government's efforts to privatize domestic industries. It has already privatized some of its airports and Telekom Malaysia Bhd. 

There are two possible futures for Lotus. First, its new owner could allow it to complete its five year restructuring plan that is already in its second year. The plan is for Lotus to invest $750 million to develop a new Esprit, Elise, Elite and Eterne and to sell 8,000 cars a year by 2014. Lotus sold just under 2,000 cars in the 2011 fiscal year. The other option is that Lotus would be sold. Current speculation says that Genii Capital who owns the Team Lotus Formula 1 team would buy the company. Proton had said that it had no plans to sell Lotus, but now that it has been privatized, Lotus's future is far from certain.  

The sale of Proton will not be finalized until the second quarter until 2012. That gives Lotus some time to show that its plan is working to prevent a sale. 

Proton bought a controlling stake of Lotus in October 1996.

Source Bloomberg