This article first appeared in The Edge Financial Daily on May 25, 2017

PUTRAJAYA: DRB-Hicom Bhd is exiting the sports car segment with its sale of Lotus Advance Technologies Sdn Bhd to Zhejiang Geely Holding Group Co Ltd, which will take a controlling 51% stake, and Etika Automotive Sdn Bhd, which will buy the remaining 49% stake.

“The bid submissions [for Lotus] were lower than the £100 million (RM556.04 million) we got [from Geely and Etika], so we got a slight premium,” said DRB-Hicom group managing director Datuk Seri Syed Faisal Albar yesterday after the signing of the agreement between Geely and DRB-Hicom for a 49.9% stake in Proton Holdings Bhd.

According to Syed Faisal, the sale of Lotus, which Proton acquired in 1996, followed an international bidding process.

“Lotus’ price is a number that we can defend, especially when there is a related party acquiring part of the [carmaker],” Syed Faisal said, with reference to Etika Automotive, which is controlled by tycoon Tan Sri Syed Mokhtar al-Bukhary’s Etiqa Strategi Sdn Bhd. Etiqa Strategi owns a 55.9% stake in DRB-Hicom, according to the group’s 2016 annual report.

Responding to a question about how much Lotus had cost DRB-Hicom, Syed Faisal said: “I don’t have the figures, but it’s a pain, and I’m glad the pain is no longer around ... but they are an excellent company. We had the choice not to go on [working] with Geely on Lotus.”

In a statement, Geely said it aims to “unleash the full potential of Lotus Cars and bring it into a new phase of development”.