MILAN, Oct 8 (Reuters) - The board of loss-making Italianreal estate group Prelios will meet on Thursday, aperson familiar with matter said, as it seeks to secure a rescuedeal after being brought low by writedowns on propertyinvestments in a weak economy.
The indebted group said on Aug. 28 it was in talks with twopotential buyers and its ability to remain in business hinged ona deal.
An Italian consortium called Feidos and U.S. fund Fortress
have both made offers to buy Prelios, which managesproperties in Italy and Germany including shopping centres,department stores and corporate headquarters.
The two groups have met with Prelios' creditors, includingtyre group Pirelli , as well as Prelios' controllingshareholders Assicurazioni Generali , Mediobanca, Intesa Sanpaolo and Camfin , saidthe 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' offercould be favoured by the board. It calls for a 175 million eurocapital increase.
Fortress said on Monday it had no comment on the report.
Prelios, with about 11.7 billion euros of real estate assetsunder management, had net debt of 494.4 million euros at the endof the first half, when it posted a loss of 125.7 million euros.
In addition to its net debt, Prelios holds a share ofaggregate 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 4.8billion euros as of June 30, the presentation said, of whichPrelios' share is 1.1 billion euros.
Prelios said on Aug. 28 it had obtained a waiver to repayinterest to its creditors until the end of 2012.
It also said it would postpone interest payments to Pirellion a 160-million-euro loan until June 2013, leading Citigroup ina report last month to question whether Pirelli would be able tokeep its pledge to bring its debt down to below 1.1 billioneuros by year-end from 1.7 billion euros on June 30.
"We believe ... there is a prospect for this loan to bewritten down, which would make it less easy for Pirelli to reachits target of net debt of below 1.1 billion euros by end-2012,"said Citigroup.
(Reporting by Claudia Cristoferi and Jennifer Clark; Editing byMark Potter)
Keywords: PRELIOS BOARD/