Mahindra and Mahindra may back Cimino bid

Auto major Mahindra & Mahindra may possibly back the plan of Sicilian financier Simone Cimino for the conversion of Fiat SpA’s Termini Imerese car factory into the electric vehicles’ production. Cimino has got a former agreement with Reva Electric Car Co. Cimino stated that the agreement had been done for the purpose of building electric cars at Termini. Cimino now intends  to make an investment of around $602 million.

The Reva company is a closely held company which is located in Bangalore. In the month of May, Mahindra and Mahindra had agreed upon buying 55% of this Reva company. On the other side, Fiat intends to hold its production at the lucrative and unprofitable factory by the end of year 2011. This factory has got 1,400 employees in Sicily and it assembles the model Lancia Ypsilon. Italy-based carmaker, Turin loses e1,000 on each model produced at the plant. Partly, the reason behind this is the lack of infrastructure and also the high expenses of  shipping parts to the island. Cimino was quoted saying that they have the financial power for developing the plant and absorbing the workforce.

Private equity funds which are managed by Cimino might contribute about  e100 million for the  project. President of Mahindra’s automotive and farm-equipment unit, Mr. Pawan Goenka commented that he went through “positive discussions” with Cimino. He further added that a plan for the Sicilian factory formed an important part of their discussion. He also said that he liked Cimino’s proposal. Mr Goenka also added that till now the proposal is at a preliminary stage.

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