Pininfarina still discussing sale to Mahindra, hopes for deal in July: sources

Milan: The key investor in Pininfarina and its creditor banks are still seeking to agree a sale of the indebted Italian car designer to Indian vehicle maker Mahindra & Mahindra, two sources close to the matter said.[caption id=“attachment_2276490” align=“alignleft” width=“380”]  New deal soon? Reuters[/caption] The sources said the parties involved were trying to reach at least a preliminary accord by the end of July after failing to strike a deal before a shareholder meeting on 29 April. Pininfarina declined to comment. Mahindra did not answer a request for comment. Leading creditor banks UniCredit and Intesa Sanpaolo had no immediate comment. A third source close to the matter said Mahindra may push back further a possible deal in order to agree on a lower price. Pininfarina is hard pressed for time. Its operating loss more than doubled in the first quarter from a year earlier. It expects to post an operating loss in the full year and sees net debt at the end of 2015 above the previous year’s level. It said in May that it would struggle to meet targets set by creditors for this year’s earnings before interest, tax, depreciation and amortisation (EBITDA). The breach of the EBITDA covenant would give creditor banks the right to ask Pininfarina to repay its bank debt, which has a nominal value of 102 million euros. But the third source said that the banks were likely to look for ways to allow the company to continue operating. A new debt restructuring is the most likely option, two sources said, after a similar agreement was agreed in 2012 and would expire in 2018. An Italian daily reported on Saturday that some of Pininfarina’s creditors had rejected Mahindra’s €80 million ($89 million) offer as it envisaged writing off half of the group’s debt. Reuters