Morgan Grenfell Private Equity (MGPE) and Roberto Colaninno, the Italian entrepreneur, have signed a deal to halve the debt held by Piaggio, the Italian scooter manufacturer, and have convinced a syndicate of 26 Italian banks to convert its debt to equity.

Graham Clempson, chief executive of MidOcean Partners, which manages the MGPE portfolio for owners Deutsche Bank, said he believes this is the first time the Italian market has seen a debt-for-equity conversion. The syndicate, led by Banca Intesa, now owns a 38% stake, has seats on the board, and has injected €120m ($138m) in cash.