The Italian car designer Pininfarina has been reportedly in talks to sell its indebted assets to Indian vehicle manufacturer Mahindra & Mahindra, with the latest rumors claiming negotiations will resume in September.
The summer came with a pause in the talks as the two parties didn’t reach an agreement in July, according to people that have knowledge of the matter. One of the two sources, who declined to reveal their identity because the discussions are still private, said the main investor in Pininfarina and the company’s crediting banks want a deal for the sale but Mahindra is “very cautious and plans to invest in Pininfarina at the lowest possible price.” Earlier this month other sources hinted Pininfarina and the Indian manufacturer were mulling a signed deal by the end of the month. Pininfarina, a globally famous design house, involved in the creation of Ferraris such as the Dino and Testarossa is being pressured as its operating loss jumped to more than double during the first quarter of the year from the same period last year. It has also forecasted its full year operating loss and net debt would rise above the level seen in 2014. It also announced in May it would have difficulties achieving the goals agreed with creditors for the year’s earnings before interest, tax, depreciation and amortization (EBITDA).
But the sources also said the creditor banks alongside Pininfarina’s key shareholder Pincar –owner of 76 percent of the group – would seek to keep the company afloat even if the debt would need to be restructured again. The company made similar restructuring strategies in 2009 and 2012 and now is in debt with around 100 million euros to a group of banks.
Via Automotive News Europe