Pininfarina family loses control

THE Pininfarina family has lost control of its famous design house as a result of accumulated debts of nearly 600 million euro ($A1.2 billion).

Less than five months after company boss Andrea Pininfarina was killed in an accident while riding a Vespa scooter, the family has agreed to relinquish 50.6 per cent of the company by the end of January.

According to The Times in London, potential buyers of the legendary design studio could include French tycoon Vincent Bollore, who one year established a joint venture with the Italian company to build an electric car (pictured below) that was previewed at the Paris motor show three months ago.

Another name mentioned was that of Ratan Tata, although the Indian industrialist is already embroiled in the financial rescue of Jaguar Land Rover, which he only bought from Ford last year.

Pininfarina joins a growing list of iconic car brands that have become casualties of the global recession.

Formed in 1930 by Battista “Pinin” Farina, the Pininfarina design house really took off in the 1960s under the leadership of the founder’s son Sergio, who became the company’s honorary chairman when his son Andrea took over in 2001.

Pininfarina designed the bodies for numerous trend-setting Ferrari, Maserati and Alfa Romeo models and had expanded into niche manufacturing, a move that has ultimately caused its present troubles.

The Turin company currently builds cars for Alfa Romeo (Brera and Spider), Ford (StreetKa coupe and Focus convertible) and Volvo (C70 convertible), each of which has suffered from the global sales downturn.

By the end of November, Pininfarina’s debt had reached 597.7 million euro and without the deal with creditor banks the 2008 losses would have wiped out the company's capital.

The Pininfarina family’s holding Pincar announced on Wednesday (December 31) that it had agreed with the banks to sell its 50.6 percent stake and will appoint an adviser by February 28 as part of the deal.

As part of the agreement, 180 million euro of debt will be assumed by Pincar to give Pininfarina the working capital it needs for 2009 and the potential buyer of Pincar’s stake will have to launch a bid on the remaining stake in Pininfarina.

At the time of Andrea Pininfarina’s death, Italian Prime Minister Silvio Berlusconi described the family as a “dynasty that helped bring the story of ‘made in Italy’ to the world”.