Pininfarina nears debt deal: source
September 18th, 2008 | by admin |MILAN (Reuters) – Italian car designer and niche manufacturer Pininfarina has reached an agreement in principle with its creditors to reschedule 600 million euros of its debt, a source with direct knowledge of the talks said on Wednesday.
“The banks have agreed in principle,” the source told Reuters. “It is just a question of signing on to it.”
They are likely to sign the rescheduling by September 30, the source said, adding the agreement would give Pininfarina up to seven years rather than up to three years to pay the debt.
Pininfarina (PNNI.MI: Quote, Profile, Research, Stock Buzz) and creditors including Intesa Sanpaolo (ISP.MI: Quote, Profile, Research, Stock Buzz) and UniCredit (CRDI.MI: Quote, Profile, Research, Stock Buzz) have been in talks since signing a standstill agreement on the debt on August 1.
Best known for designing Ferrari luxury sports cars, Pininfarina needs to reschedule the debt before holding a capital increase as part of a major restructuring to revive its struggling business.
The capital increase for 100 million euros ($142 million) would be done in the first half of November, the source said.
The operation will see the founding Pininfarina family reduce its stake to about 30 percent from 55 percent and allow a select group of investors such as French financier Vincent Bollore to become shareholders.
The family will use the proceeds to finance a joint venture with Bollore to develop an electric car, a project that is pivotal to Pininfarina’s revival.
The source said Bollore and all the other investors were still ready to take part in the capital increase despite the difficult market conditions.
(Reporting by Gilles Castonguay; Editing by Quentin Bryar)