Lotus Under March Deadline to Secure Funding

Troubled British sports-car maker Lotus needs to secure £100 million ($155 million) in funding by early next year if it is to remain afloat, a Malaysian newspaper is reporting.

The Business Times quotes DRB-Hicom Managing Director Khamil Jamil as saying Lotus needs the money by next March.

Lotus is owned by Malaysian car company Proton, which in turn is owned by DRB-Hicom.

Proton already has sent £100 million to Lotus this year after several banks cut their credit lines to the sports-car maker.

Lotus had drawn more than £200 million ($310 million) of loan money before the banks withheld the remaining £62.5 million ($97.0 million).

“Lotus’ cash flow is very bad right now. Proton is funding the cash flow, but I think there is light at the end of the tunnel,” Khamil tells the newspaper.

Khamil, also chairman of Proton and Lotus, says Proton has submitted a revised plan to the national auto maker's six big lenders.

“I have made a personal presentation to the bankers and we are looking to work out a solution where we can draw down the loan,” he says. “Between now and December, they (the bankers) will decide.

“If Lotus fails, DRB-Hicom will fail.”

Khamil says this is because Proton has provided the guarantees on the Lotus bank loan.

Lotus obtained some RM1.3 billion ($409.7 million) in long-term loans in April 2011 to be used as part of a RM2.4 billion ($756-million) turnaround plan centered on the company coming up with five new sports cars within five years.

“The 5-year, 5-model plan was aborted by the previous management,” Khamil says. “We are in the midst of revising plans for Lotus.”