29 January 2012

Any Hidden Agenda Behind the Sales of POS and PROTON?

Lately, there was a slew of divestment by Khazanah Nasional Bhd (Investment arm of Malaysia Government). And, the most recent one was the divestment of Proton stakes to DRB-Hicom. But, the strange part was DRB-Hicom was the winning bidder for Khazanah's stake in POS Malaysia last year too.

Questions have been pouring in to Finance Malaysia regarding this issue, such as, are there any linkages between the two national deals? Other than DRB-Hicom, there was none other better suitors? As such, we would like to give our opinion on this matter. (Just for your reading pleasure)

You have the Questions, We have the Answers
First, both POS and Proton were considered as "sunset" companies in their respective industry. Both were not managed well and fallen from their glamorous days. Just as many investors written them off from investment radar, DRB-Hicom comes into the picture. Frankly speaking, the only asset both companies have was Government's backing.

While POS has the monopoly status in its services, Proton being the national car maker was trying to monopolize too by merging with Perodua. It's been a hot debate on whether Proton and Perodua should merge for better synergies. Anyway, we think that they should remain status quo to creates a healthy competition for consumers benefits.

Idea of the year: Combining POS and Proton via Stamp?
Where is the money comes from?
Another question was on the financial soundness of DRB-Hicom to acquires both companies. We as investors knows that DRB-Hicom does not have much cash in hand (even after excessive borrowing). The 32.21% stake at RM3.60 per share in POS costing RM622.79mil. Then, how about the Proton stake which amounted to over RM1bil? It's like a snake swallowing a cow, then a buffalo within few months!!! Can you imagine?

Any Hidden Agenda?
After all this, Finance Malaysia comes out with a guessing questions on the two deals between DRB-Hicom and Khazanah. Anything to do with the upcoming general election? (Seems like everything was linked to GE nowadays) Does the Government scared of losing the next general election and preparing to divest some of its assets first? Then, to whom they should divest to? Of course, their allies, right? DRB-Hicom?

But, what if they won again and POS and Proton was sold? No worry, because their good ally will always be able to sell it back to them (potentially with good investment gains too). Then, Khazanah can re-list again both POS and Proton proudly. Is this the case?

Well, we're guessing only. And, once again, this is for your reading pleasure only. Don't take it seriously. Happy Guessing.

1 comment:

Finance Malaysia Blog appreciates your comment. Cheers!