DRB-Hicom Bhd’s unit, Proton Holdings Bhd, has terminated its equity joint-venture contract (EJVC) with Goldstar Heavy Industrial Co Ltd, as the joint-venture firm, Goldstar Lotus Automobile Co Ltd, had failed to secure its manufacturing licence within the stipulated time frame.
In a filing to Bursa Malaysia today, DRB said the deadline to obtain the manufacturing licence was originally set for Sept 25, 2017, subsequently extended by the parties to Dec 31, 2017.
“Failure to obtain the said manufacturing licence within the agreed time frame entitles either party to terminate the EJVC,” it said.
The purpose of EJVC was to form a joint-venture company to produce and sell Lotus branded passenger cars, engines, parts, components and accessories, and provide after sales services, including spare parts in connection with its products in China.
DRB said the termination of the EJVC would not have any effect on DRB’s issued and paid-up share capital and substantial shareholders’ shareholdings.
“There will also be no material effect on DRB-Hicom Group’s earnings, gearing and net assets for the financial year ending March 31, 2018,” it added.