The was revealed in DRB-Hicom’s filing with Bursa Malaysia on the money and its intention to use the funds to settle a RM525 million syndicated loan facility.

According to the report, the funding had been requested when PONSB was still part of Proton Holdings Bhd and prior to DRB-Hicom taking over both companies.

In its application, made on Aug 19, 2011, PONSB had asked Putrajaya for a total reimbursement of RM3.7 billion for its R&D expenditure.

However, the approval for part of the amount of RM1.1 billion only came through this year.

“In June, DRB-HICOM received a letter of approval from the finance ministry for the award of a reimbursement grant for R&D activities carried out by PONSB,” NST quoted DRB-Hicom as saying in its filing with the Bursa.

DRB-Hicom also said that the reimbursed funds would be used by PONSB to “de-leverage to the maximum extent possible by reducing its existing financial liabilities.”

“The de-leveraging process would enable both PONSB and Proton to be in a much stronger credit position to fund its future growth and expansion plans,” the company added in its filing.

After settling the RM525 million loan, plus RM8.3 million in accrued interests, PONSB will use the remaining funds of about RM566.7 million to help Proton to partially settle any outstanding debts with DRB-HICOM.

However, DRB-Hicom said that the finance ministry will be paying the RM1.1 billion “only upon completion of the definitive agreements” relating to the entry of a foreign strategic partner into Proton.

This was in reference to China’s Zhejiang Geely which had agreed to buy a 49.9% stake in Proton Holdings in June.