Car design Pininfarina family to sell in debt deal

MILAN, Dec 31 - The Pininfarina family is set to sell out of its company, the designer of iconic cars for films and Ferrari, in a deal which will help the group handle its nearly 600 million euros debt.

The brand, another casualty of world recession as car orders slow, said in a statement on Tuesday the family's holding Pincar had agreed with creditor banks to sell its 50.6 percent stake and would choose an adviser by Feb. 28, 2009.

A draft accord should be signed on Wednesday.

As part of the agreement, 180 million euros of debt will be assumed by Pincar to give Pininfarina the working capital it needs for 2009. Wednesday's deal will reschedule its other debts.

The deal has to be implemented by the end of January. Without the deal, 2008 losses will wipe out the company's capital, the statement said.

At the end of November 2008, net debt was 597.7 million euros.

The potential buyer of Pincar Holding's stake will have to launch a bid on the remaining stake in Pininfarina.

Creditor banks, which include Italy's biggest lenders, Intesa Sanpaolo and UniCredit, will get the lesser of the price Pincar receives from the sale of the 50.6 percent stake or the 180 million euros plus interest.

Tragedy hit the company in August when its chairman and chief executive, Andrea Pininfarina, died in a car crash.

He was the grandson of the founder, Battista "Pinin" Farina.

The company has designed vehicles for Italy's leading car maker Fiat and Prime Minister Silvio Berlusconi described the family as a "dynasty that helped bring the story of 'made in Italy' to the world."