Published on March 30th, 2015 | by Daniel Sherman Fernandez0
Pininfarina Sold To India’s Mahindra & Mahindra
Pininfarina’s controlling shareholder, Pincar, confirmed that India’s Mahindra & Mahindra has expressed interest in buying the Italian car designer. There are no binding agreements between the parties regarding a purchase by Mahindra, shareholder Pincar said in a statement distributed by the Italian stock exchange today.
Owned by the Pininfarina family, Pincar holds 76% of the company. Pincar said it has been reviewing several options regarding the development of the company jointly with financial institutions. Among these is an eventual sale of its stake.
Mahindra is closing in on the purchase of Pininfarina after weeks of talks, people familiar with the matter said Wednesday. Negotiations are continuing and could still fall apart, said the people, who asked not to be named because the discussions are private.
Founded in 1930, Turin-based Pininfarina has designed automotive classics such as the Ferrari 250 GT and the 1950s-era Alfa Romeo Giulietta Spider.
Pininfarina’s shares rose 26% to 5.15 euros in Milan last week Wednesday and were up 3.9% at 9:01 CET last week Thursday.
Pininfarina has been losing money for years and has a bank debt that is almost equal to its market value. It has been struggling as car companies hired more in-house stylists at the expense of independent design firms. The company has expanded its design work to buildings, interiors, furniture and electronics. It reported a 2014 net loss of 1.3 million euros. Its net debt stood at 45 million euros at the end of 2014 and is expected to rise this year.
Mahindra is already one of Pininfarina’s most important customers. Mahindra has earned a reputation for buying distressed, undervalued companies. In 2010, it bought troubled South Korean automaker SsangYong Motor and last year it acquired a majority stake in PSA/Peugeot-Citroen’s money-losing scooter business.