Group Lotus bosses insist its business as usual at the Hethel-based firm following Proton sale
Bosses at Norfolk car maker Group Lotus yesterday insisted it was business as usual for the firm as it emerged that the Malaysian government has sold its controlling stake in parent company Proton.
Weeks of speculation about the sale of Proton, which bought Group Lotus in 1986, came to end following the announcement that Malaysia's state owned investment firm Khazanah Nasional, has sold its 42.7pc stake in Proton Holdings to Malaysian car distributor and importer DRB-Hicom in a �267m deal.
Last night the firm stressed that it was 'business as usual' at Hethel, but with signs the new owner is set to review the business, it is still not clear what the deal will mean for the Hethel-based firm and it's growth plans.
Proton had bankrolled an ambitious �200m turnaround plan for the loss-making car company, aimed at creating hundreds of new jobs by transforming the firm from a specialist niche car company into a profitable sports car brand and more than double production to around 7,000 models by 2014.
As part of the vision, the company last year also secured �10m from the government's regional growth fund (RGF) to create an engineering research centre at Hethel.
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Crucially, Group Lotus' most recent director's report show that �270m of funding is now in place to support its business plan, which it says has been guaranteed by Proton and is 'subject to various legal covenants and conditions'.
A Group Lotus spokeswoman said: 'It doesn't change anything for us at the moment,' she said. 'The situation that's currently going on in Malaysia doesn't change anything. Our plan remains the same - it's business as usual.'
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Yet the director's report also showed the it made a pre-tax loss of �26.1m in the year to March 201, compared to a loss of nearly �12m in 2010.
And reports in the Malaysian business press suggests the new owner will carry out a 'critical assessment' on the Lotus turnaround plan as a top priority to ensure that it can stand on its own two feet and be successful, and it is likely to cast a cold eye over its overall direction and marketing strategy.
The review is also said to focus on Lotus' involvement in international motorsports sponsorships, especially in Formula One racing, where it has teamed up with Renault, and recently announced the signing of former world champion Kimi Raikkonen as part of plans to promote the Lotus brand.
Last year the company also teamed up with Norwich City Football Club in a five year deal thought to be worth six figures to the Canaries.
While the sale deal also comes as the Group Lotus gets set to open a 4,000sq ft store in London's Regent Street.
Ann Steward, cabinet member for economic development at Norfolk County Council, said, which is next week set to confirm a separate �3.77m loan plan to help expand the neighbouring Hethel Engineering Centre said: 'We will continue to work with Lotus and support them and their growth plans for the future. We haven't heard anything to the contrary and we will continue to work closely with them.
'Obviously we talk to Lotus as they are right next door to the Hethel Engineering Centre and it's essential we do because of the benefits of Lotus to the wider A11 growth,' she added.
Officials at the Department for Business, Innovation and Skills (BIS) are expected to complete the legal checks into the Lotus regional growth fund bid in the spring. However the EDP understands that any major change in the Proton funding is likely to trigger a review of the government's position.
A BIS spokeswoman said: 'We are continuing to work with Lotus to process the conditional offer of support from the regional growth fund round 2. As with any bid, a final offer of support will depend on the company successfully completing all necessary legal checks, including with regard to the company's plans for successful delivery of the proposed project set out in the RGF bid.'
DRB-Hicom, which is owned by Malaysian Syed Mokhtar al-Bukhary, builds and distributes Mercedes and Volkswagen models, and has eight assembly plants, four of which are for cars. The deal gives DRB control of two plants in Malaysia with a combined capacity of 350,000 units per year.