"With Zhejiang Geely Holding Group on board, Proton can now eye the huge Southeast Asian passenger auto market with renewed confidence", he said at the signing ceremony of the deal, which was attended by Malaysian Prime Minister Najib Razak and Zhejiang Geely Holding Group chairman Li Shufu.
Of the sum, RM170mil will be paid via a cash injection, with the remaining RM290mil as a transfer of Geely's Boyue sports utility vehicle (SUV) platform to Proton.
Geely took up a 49.9 per cent stake in Proton for RM460.3 million (S$150 million).
"Whatever spending [we will make] will depend on what Proton will be, in terms of its long-term product planning [such as which market segments the company will enter]".More news: Germany clings on to beat Australia after keeper's blunders
Proton, founded in 1983 by former Malaysian prime minister Mahathir Mohamad, re-badges cars from foreign manufacturers to sell in the local market.
Najib (middle, back row) witnessing the MOU between DRB-Hicom represented by Syed Faisal and Zheijiang Geely Holding Group represented by president Ah Chonghui yesterday.
"Our partnership will enable Proton to become the industry leader in Malaysia and a top three brand in Southeast Asia".
"But that is the people's money and it would have been irresponsible for us to continue with a business model that was never going to succeed", he said in his speech at the signing ceremony between DRB-Hicom and Geely Holding.More news: Grocers facing a united Amazon-Whole Foods must adapt
Geely chairman Li Shufu said the company's priority will be to turn around both Proton and Lotus and put them on a sustainable growth path. Most likely, the engineers of the British brand will work together with a Studio Polestar - Volvo factory tuner, which is developing the "charged" versions of models for the Swedish brand. Under a government-led turnaround plan, Proton will sell its Shah Alam plant and consolidate operations in Tanjung Malim, which has an annual capacity of 350,000 cars.
"The government will also reimburse RM1.1 billion to Proton for the amount it had spent on R&D to produce new cars, " he said, adding that Proton had spent a total of RM3.5 billion in the past on R&D.
ZGH in 2010 acquired Sweden's Volvo Cars.
On the RM1.5 billion soft loan given by the government in June previous year, Syed Faisal said, the government was expected to release the balance of RM250 million as the company had met the conditions set by the government's special task force with the signing of Geely as its strategic partner.More news: McCain: Americans 'stupid' to travel to North Korea