Milan: Talks on the sale of indebted Italian car designer Pininfarina to Indian vehicle maker Mahindra & Mahindra will resume after the summer after the parties failed to strike a deal in July, two sources close to the matter said on Tuesday.
The key investor in Pininfarina and the group`s creditor banks are still seeking to agree a sale but Mahindra is "very cautious and plans to invest in Pininfarina at the lowest possible price", one of the sources said.
Earlier this month sources had said Pininfarina and Mahindra were trying to reach a deal by the end of July.
Pininfarina, which designed Ferraris such as the Dino and the Testarossa, is hard pressed for time. Its operating loss more than doubled in the first quarter from a year earlier.
It expects to post a 2015 operating loss and sees net debt at the end of December 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).
However, Pininfarina`s controlling shareholder Pincar - which has a 76 percent stake in the group - and the creditor banks are keen to keep the company going even if a new debt restructuring may be needed, the sources said.
Pininfarina, which owes around 100 million euros to a group of banks, already restructured its debt in 2009 and 2012.
One obstacle to a potential deal was removed in recent weeks through the decision by an Italian court to uphold a ruling which rejected a labour dispute that could have forced Pininfarina to hire 900 former employees of now bankrupt car manufacturing group De Tomaso.
An Italian court`s ruling that rejected a labour dispute that could have forced Pininfarina to hire 900 people in recent weeks removed an obstacle to a possible deal.
Pininfarina had sold in 2009 some industrial operations to now bankrupt car manufacturer De Tomaso, including 900 workers who had challenged the sale in court.
Mahindra, Pininfarina and the main creditor banks, Intesa Sanpaolo and UniCredit declined to comment.