Malcolm Flynn | Jul 26, 2012

Lotus has scrapped its ambitious ‘five cars in five years’ plan, according to reports out of Malaysia this week.

“Five cars at one go, is no go,” Proton deputy CEO Datuk Lukman Ibrahim was quoted by Malaysian paper The Star.

Dropping the plan announced at the 2010 Paris Motor Show, the British sportscar manufacturer is expected to instead focus on three new models, starting with the new Esprit already in development.

Owner DRB-HICOM is also said to have rejected a recent £1 (AU$1.50) takeover offer for Lotus, with the bidder willing to inherit Lotus’ reported £207 million (AU$311 million) debt.

However, it would appear that it is this debt that binds Lotus to Proton.

The £207 million (AU$311 million) figure is reportedly part of a £270 million (AU$406 million) syndicated loan, taken out under former CEO Dany Bahar’s leadership in 2010.

Lotus’ 2011 third-quarter results revealed that the remaining £63 million (AU$95 million) had subsequently been frozen by creditors.

DRB-HICOM MD and Proton executive chairman Datuk Seri Mohd Khamil Jamil has confirmed that the loan has been guaranteed by Proton.

“If Lotus is in trouble, the lenders will go to Proton. Looking at Proton, it is in no position to absorb the amount,” Mohd Khamil said.

“Then, they will go to the grandfather, the ultimate holding company, which is DRB-HICOM. We have 53,000 staff with us and we cannot allow Lotus to take us down.”

DRB-HICOM is said to be negotiating with these creditors to access the remaining £63 million (AU$95 million) of the loan.

This news follows the recent reports of a renewed Volkswagen Group partnership bid for Proton, but it appears certain that such a sale would not happen without the inclusion of Lotus.

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