Mahindra Inches Closer To Buying Pininfarina
Last month, we reported that shareholders and creditors of Italian auto designer Pininfarina had yet to come to a sales agreement with it’s potential buyer. The problem was that potential purchaser Mahindra and Mahindra – the largest SUV producer in the Indian market – was proceeding cautiously. That wasn’t much of a surprise, considering Pininfarina hasn’t made a profit for the better part of the last 12 years. Now, nearly a month later, we’ve learned that an agreement may be reached as early as the end of this week.
The sales negotiations between the two companies, shareholders and creditors have been private, but our sources have been in touch with insiders who spoke behind the curtain of anonymity. The final details left to iron out are the final purchase price of Pininfarina and some issues related to Pininfarina’s cesspool of constantly increasing debt. As of this morning, Il Sole 24 Ore – an Italian newspaper – reported that sales negotiations between the two companies were nearing a close and, after surging 11 percent, Pininfarina’s shares have also been halted. We’re not sure what the outcome will be, but read on for more information.
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Why it Matters
Pininfarina was said to be looking at other options to keep itself alive should this deal fall through, but with a total debt of more than $57 million after the first half of this year, it is clear Pininfarina is in serious trouble. Without a major influx of capital, I don’t see how the Italian designer can continue on any longer. Any deal with Mahindra and Mahindra (or any other company for that matter) must be approved by the creditors as well, so it is no surprise that the negotiations are dragging on as they have.
It would be a shame to see the designer turn belly up and vanish at the end of a trail of debt.
I’m really hoping a deal can be reached. It would be a shame to see the designer turn belly up and vanish at the end of a trail of debt. Its work with Ferrari, BMW and Rolls-Royce has been legendary in my opinion – it did design the 1984 – 1991 Ferrari Testarossa, which was arguably one of the most beautiful cars of the late 1980s. Not to mention I would love to see the 2013 Sergio Pininfarina Tribute Concept become a reality.
The car itself has a backward-looking design, but that is part of what makes it so beautiful and curious. Some might be worried that a company that is widely unknown outside of its home country would only ruin the Pininfarina name – especially with some of its funky looking mini SUVs like the 2008 Mahindra Reva-i and the 2013 Mahindra Reva NXR. I, on the other hand, look at its 2015 Mahindra Komodo IED Concept and see potential for the automaker.
By joining forces with the design experience and intelligence of a company like Pininfarina, I think it might be the beginning of great things for Mahindra. Moreover, In case you don’t know about the soon-to-be parent company, Mahindra has been doing quite well financially. At the end of its fiscal year back in March, the company had cash assets and short-term investments totaling more than $1.02 billion dollars.
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Source: Automotive News