The talks regarding the sales of the Italian car designer Pininfarina, drowning in debts, to the Indian Carmaker giant company Mahindra and Mahindra will be continued after the summer. It has been a fact that the two companies failed to come together on a conclusion regarding the sales of the Italian company during the talk session held in July 2015. The sources keeping a keen eye on the matter said that the two parties failed to close the deal during the last meeting thus in order to seal the final deal they will see each later this year and hopefully, this time around, they will close the deal.
One of the sources also mentioned that Mahindra doesn’t want to invest a ‘lot of money’ and is being very cautious regarding the sale and while on the other hand, the main investors and the credits providing banks for Pininfarina are quite desperate for the sale to take place in order to recover at least some of their finances they lost investing in the Italian car designer company. The same sources provided information earlier and said that both the companies are looking forward to have the deal finalized by the end of July.
Pininfrania, having designed biggies like Ferrari Testarosa and Dino used to be quite a successful name in the car designer segment but with time, things changed and slowly the company became heavily indebted. For the operations, the total losses occurred got doubled in comparison with last year and that too only in the first quarter of the current year. And going by the numbers the company is expecting much bigger annual loss statistics by the end of the year, hence the deal becomes much more essential and taking help from the Indian Biggie Mahindra seems to be the only logical choice at the moment.
In May, it was said that the company will struggle very hard to meet the set targets (by the creditors) for this year’s total earnings before all other factors like tax, depreciation, interest and amortization.
And during the recent developments on the case, the controlling shareholder of Pininfarina, Pincar, which is also the topmost share holder of the car designer firm, having a stake of whopping 76 percent along with the banks providing the credits are quite desperate to let the company keep running and it doesn’t matter if a new debt structure is required to do so, as reported by the sources. The complicated nature of the matter is one of the reasons for the delay in finalizing the deal with Mahindra and Mahindra.
The Italian car designer are said to be in a debt of 100 million Euros to a group of financial institutions and banks. And that too when Pininfarina already reconstructed its debts twice, in the year 2009 and three years later in 2012 and a third Reconstruction doesn’t seem to be a good idea considering the previous attempt’s failures.
Although it is expected that this time a deal will take place, Mahindra, Pininfarina were unavailable to comment.