The two key person behind the fatal acquisition of Agusta SpA, Proton adviser Mahathir Mohamad and the former maverick CEO of Proton, Mahaleel (also called the 2Ms of Proton) questioned the rationale behind Proton's sale of MV Agusta Motors S.p.A. for one Euro (RM4.50).
In a joint statement released here, they also raised several insinuating questions regarding the Euro$1.00 disposal by Proton. The disposal might have caused Proton some RM510 million losses which appears in Proton’s 2005 annual report cash flow statement. It include the acquisition price of 70 million euros or RM367.68 million and further RM142.66 million presumably for financial assistance.
Questions raised by the 2Ms were:
- Who is the person responsible for making the offer to sell at one euro ($RM4.48)?
- Were there other bidders?
- Was there an attempt to get the buyer to pay a higher price?
- Was there an announcement that M.V. Agusta was up for sale?
- If not, did Proton approach only one bidder?
- If other bidders were offered, did they reject?
- Who in fact made the decision to sell?
Can Proton be willing to explain how selling an entity bought at 70 million euros for one euro would not cause Proton to lose money as is claimed?
The company that offered to buy the cheapsale outfit at Euro$1.00, Gevi S.p.A. is not a household name in the automotive industry, said the 2Ms.
If the small motor outfit, Gevi SpA is confident to turnaround Agusta, does it imply that Proton, a far larger and bigger giant automobil manufacturer, is utterly incapable and lack the competency and expertise to turnaround Agusta?
"As the two people most actively involved in the purchase of M.V. Agusta, our credibility and honesty is at stake. We want to know the correct answers," said the 2Ms.
Due to the sale, 2Ms said there was no possibility now for Proton to turn around the company and regain its purchase price, if not make a profit. "Of course, Proton will now not get access to MV Agusta engineering technology." They added that Proton bought MV Agusta fully knowing that it had a debt of Euro 230 million, which it does not have to pay for three years. In addition, MV Agusta has assets in the form of two plants (in Cassinetta and Morazzone) and stocks of motorcycles. "Losing automotive companies like Rolls Royce, Bentley, Skoda, Lamborghini, Aston Martin and many others have been bought by stronger companies and have been turned around. "But the price reflect the assets and the brand. As far as we know they were not sold for one Euro," Dr Mahathir and Tengku Mahaleel said, stating that MV Agusta's four brands were of high value.
On Proton's ability to turn around MV Agusta, they said the building of a RM1.8 billion facility in Tanjung Malim without borrowing or capital injection from the government; and with over RM2 billion cash still left over showed that Proton was a profitable company and it knew something about management to make profit. Referring to the recent loss incurred by Proton which was said to be due to provisions made for MV Agusta loans, Dr Mahathir and Tengku Mahaleel claimed that Proton Edar CEO Datuk Maruan Mohd Said had during a press conference admitted that the discounts given by Proton had affected Proton's profits. "Unfortunately no figures were given. But apparently a total of 54,000 cars were sold in three months with rebates and large discounts which included free registration, free insurance, free first instalment payment for three months and free service. "Roughly the discount per car would be around RM2,000 or more. At RM2,000 on 54,000 cars, Proton would forego RM108 million.
"The increase in the number sold cannot make up for the amount foregone."
Describing these figures as a reflection of a failed strategy, Dr Mahathir and Tengku Mahaleel said instead the loss was attributed to provisions for debts of MV Agusta. "When provisions are made for bad debts, it does not necessarily mean that the debts cannot be recovered. "The debts of MV Agusta are frozen in any case and it need not be paid immediately. Has the amount provided been paid so as to reduce MV Agusta's debt or is it still with Proton when MV Agusta was sold at one Euro?" they asked.
The scene is now set for a tatanic showdown. Let's wait for the corporate-political tsunami to erupt as it will open up the pandora boxes.
The company that offered to buy the cheapsale outfit at Euro$1.00, Gevi S.p.A. is not a household name in the automotive industry, said the 2Ms.
If the small motor outfit, Gevi SpA is confident to turnaround Agusta, does it imply that Proton, a far larger and bigger giant automobil manufacturer, is utterly incapable and lack the competency and expertise to turnaround Agusta?
"As the two people most actively involved in the purchase of M.V. Agusta, our credibility and honesty is at stake. We want to know the correct answers," said the 2Ms.
Due to the sale, 2Ms said there was no possibility now for Proton to turn around the company and regain its purchase price, if not make a profit. "Of course, Proton will now not get access to MV Agusta engineering technology." They added that Proton bought MV Agusta fully knowing that it had a debt of Euro 230 million, which it does not have to pay for three years. In addition, MV Agusta has assets in the form of two plants (in Cassinetta and Morazzone) and stocks of motorcycles. "Losing automotive companies like Rolls Royce, Bentley, Skoda, Lamborghini, Aston Martin and many others have been bought by stronger companies and have been turned around. "But the price reflect the assets and the brand. As far as we know they were not sold for one Euro," Dr Mahathir and Tengku Mahaleel said, stating that MV Agusta's four brands were of high value.
On Proton's ability to turn around MV Agusta, they said the building of a RM1.8 billion facility in Tanjung Malim without borrowing or capital injection from the government; and with over RM2 billion cash still left over showed that Proton was a profitable company and it knew something about management to make profit. Referring to the recent loss incurred by Proton which was said to be due to provisions made for MV Agusta loans, Dr Mahathir and Tengku Mahaleel claimed that Proton Edar CEO Datuk Maruan Mohd Said had during a press conference admitted that the discounts given by Proton had affected Proton's profits. "Unfortunately no figures were given. But apparently a total of 54,000 cars were sold in three months with rebates and large discounts which included free registration, free insurance, free first instalment payment for three months and free service. "Roughly the discount per car would be around RM2,000 or more. At RM2,000 on 54,000 cars, Proton would forego RM108 million.
"The increase in the number sold cannot make up for the amount foregone."
Describing these figures as a reflection of a failed strategy, Dr Mahathir and Tengku Mahaleel said instead the loss was attributed to provisions for debts of MV Agusta. "When provisions are made for bad debts, it does not necessarily mean that the debts cannot be recovered. "The debts of MV Agusta are frozen in any case and it need not be paid immediately. Has the amount provided been paid so as to reduce MV Agusta's debt or is it still with Proton when MV Agusta was sold at one Euro?" they asked.
The scene is now set for a tatanic showdown. Let's wait for the corporate-political tsunami to erupt as it will open up the pandora boxes.Can we identify which and which? Which head is poisonous?
1 comment:
Hi Maverick2:
This d'mwitted desi also joined the 2Ms in arsking the proton management for answers; butt they curly said their earlier statement to the Bursa Malaysia would do. No more. no less than 1 euro.
Hey bro -- how's that pic of double==headed snake relevant here ah? D'mwitted steal. "RM313million is not going to have any impcat on Proton's earnings ..." -- I have a theory -- these guys are so used to dealing in Billions, anything in millions is SMALL CHANGE ...:)
Shit, this cold morn I have just RM1.20 in my poocker -- 2nd tehtarik also cuntnot!:(
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