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Iriz among Proton models that could tech upgrades with new partner
<p><strong>Iriz among Proton models that could tech upgrades with new partner.</strong></p>

Big Tax Credits Await Partner of Malaysia’s Proton

A newspaper report says years of massive losses &ldquo;are also making Proton an attractive acquisition target for foreign strategic partners like China&rsquo;s Geely Automobile Holdings and France&rsquo;s PSA Group.&rdquo;

Malaysian automaker Proton has an asset any foreign partner would love: more than 8 billion ringgit ($1.8 billion) worth of tax credits and a long tax holiday should it return to profitability.

The Edge Weekly newspaper says Proton’s statement for financial year ended March 31, 2016, shows the amount the tax credits.

“The billions in losses accrued by Proton Holdings over the years have pushed the company to the brink of insolvency,” the newspaper reports. “But the massive losses are also making Proton an attractive acquisition target for foreign strategic partners like China’s Geely Automobile Holdings and France's PSA Group.”

Noting Proton’s MYR8 billion in unrecognized deferred tax assets, the report says “Today, this sum should easily exceed MYR8 billion as Proton continues to bleed red ink.”

The tax credits could be used to write off tax liabilities accumulated for years if the Proton partnership turns around the automaker.

Finding the right mate will be crucial for Proton's rejuvenation, CIMB Investment Bank analyst Shanaz Noor Azam says in a note to clients. “We believe that finding the right (partner) for Proton is still (owner) DRB-Hicom’s main priority, as it seeks to move forward with Proton’s recovery plan,” he wrote.

Proton says its would-be partners have conducted their own due diligence and it is awaiting bids.

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