MILAN Feb 23 Pininfarina has postponed showing the public the prototype of its electric car after putting itself up for sale to solve its debt problems, a source close to the Italian car designer and contract manufacturer said.
Pininfarina (PNNI.MI) had planned to show it at next week's auto show in Geneva but decided instead to put on the stand the same concept car that it unveiled at the Paris show in October, the source told Reuters on Monday on condition of anonymity.
A prototype is a step further in the development of a new car, being a working model, while the concept car is basically a shell with no engine.
The source did not elaborate, and Pininfarina, best known for designing Ferraris, declined to comment.
The car is a crucial part of Pininfarina's efforts to revive its struggling business.
It is being developed with French industrialist Vincent Bollore, who will be supplying the lithium-metal-polymer battery technology to make it run.
Like others in its sector, Pininfarina has run into trouble because its clients like Ford (F.N) and Fiat's FIA.MI Alfa Romeo have suffered a dramatic drop in sales. A third client, Sweden's Volvo Cars Corp, is being sold by its owner, Ford.
It has been cutting costs by halting production at its three plants in Italy on a rotating basis.
Pininfarina was forced to revise its restructuring plan last year after failing to reach a quick agreement with its bankers to reschedule 600 million euros of debt.
It also suffered a tragedy when its chief executive, Andrea Pininfarina, died in a traffic accident.
On Dec. 31, the founding family of the same finally reached a deal with the banks, agreeing to sell its 50.6 percent stake in Pininfarina to pay off 180 million euros of the debt.
It also agreed to pay back the remainder by 2015.
By Feb. 28, the family is to choose an adviser for the sale.
Without the deal, Pininfarina's mounting losses would have wiped out its capital.
Its shares have lost more than 80 percent of their value in the last 12 months. Trading at 2.57 euros in Milan, they give Pininfarina a market capitalisation of some 24 million euros -- a fraction of the value of its debt.
Pininfarina and Bollore formed the joint venture to build the electric car in December 2007 to take advantage of the growing demand for vehicles with low -- or no -- CO2 emissions. (Reporting by Gilles Castonguay, editing by Elizabeth Fullerton)