MILAN, Oct 8 (Reuters) - The board of loss-making Italian real estate group Prelios will meet on Thursday, a person familiar with matter said, as it seeks to secure a rescue deal after being brought low by writedowns on property investments in a weak economy.
The indebted group said on Aug. 28 it was in talks with two potential buyers and its ability to remain in business hinged on a deal.
An Italian consortium called Feidos and U.S. fund Fortress
have both made offers to buy Prelios, which manages properties in Italy and Germany including shopping centres, department stores and corporate headquarters.
The two groups have met with Prelios' creditors, including tyre group Pirelli , as well as Prelios' controlling shareholders Assicurazioni Generali , Mediobanca , Intesa Sanpaolo and Camfin , said the person familiar with the situation.
The offers are "more structured" now after these meetings, the person added.
According to a newspaper report on Sunday, Feidos' offer could be favoured by the board. It calls for a 175 million euro capital increase.
Fortress said on Monday it had no comment on the report.
Prelios, with about 11.7 billion euros of real estate assets under management, had net debt of 494.4 million euros at the end of the first half, when it posted a loss of 125.7 million euros.
In addition to its net debt, Prelios holds a share of aggregate debt in real estate funds in which it owns stakes, according to a company presentation.
Total debt at real estate funds in Italy and Germany was 4.8 billion euros as of June 30, the presentation said, of which Prelios' share is 1.1 billion euros.
Prelios said on Aug. 28 it had obtained a waiver to repay interest to its creditors until the end of 2012.
It also said it would postpone interest payments to Pirelli on a 160-million-euro loan until June 2013, leading Citigroup in a report last month to question whether Pirelli would be able to keep its pledge to bring its debt down to below 1.1 billion euros by year-end from 1.7 billion euros on June 30.
"We believe ... there is a prospect for this loan to be written down, which would make it less easy for Pirelli to reach its target of net debt of below 1.1 billion euros by end-2012," said Citigroup.
(Reporting by Claudia Cristoferi and Jennifer Clark; Editing by Mark Potter)
Keywords: PRELIOS BOARD/