Report: Proton Sale Forces Lotus to Halt Development

Lotus Cars has been forced to temporarily halt development of its new vehicle line while the Malaysian government sells its stake in parent company Proton. Evo reports that Lotus CEO Danny Bahar is "completely taken aback" at the lockdown period.

The temporary halt is due to Malaysian trading regulations, which require companies to enter a three-month lockdown during which only normal trading activities are permitted. It allows company insiders to perform "due diligence" while financial deals, acquisitions, and mergers take place. Lotus has been able to continue vehicle production, albeit at a reduced pace, but has been forced to almost totally stop its research and development work on new vehicles.

Several months ago, the Malaysian government decided to divest itself of its stake in automaker Proton, selling those shares to a Malaysian industrial group called DRB-Hicom. Although Bahar had previously said he wanted Proton to sell Lotus to a larger automaker (Toyota was cited as a remote possibility), he is reportedly now worried that the company will be left high-and-dry by DRB-Hicom.

"This difficult period for Lotus finishes at the end of March and that’s when we will know then whether DRB-Hicom will want to continue with our business plan," Bahar told Evo at the Geneva Motor Show.

As a result of the shutdown, Lotus has been forced to push back the launch of the Evora GTE and Exige S -- Lotus already has taken 400 orders for the latter. Lotus also will delay the debut of the next-generation Esprit until at least 2014.

Bahar had previously said his company needed another partner willing to invest at least $790 million in order to fund development of the company's new car lineup, the Elise, Eterne, Elan, and Esprit sports cars.

Source: Evo

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