MILAN, Dec 5 (Reuters) - Italy's Banca Carige aims to sell its consumer credit unit to London-based hedge fund Chenavari by Dec. 6 when a vital 560 million euro ($664 million) cash call ends.
Genoa-based Carige must comply by the end of the year with European Central Bank demands that it boosts its capital and starts cutting bad loans to avoid being wound down.
The bank said late on Monday three of its creditors, insurers Generali, UnipolSai and an insurance unit of Intesa SanPaolo, planned to convert into Carige's shares debt they received as part of a bond swap the bank carried out.
The three insurers will buy 45 million euros in new shares to be issued under a 60 million euro portion of the cash call reserved to bondholders hit by the swap.
The bank also said it had entered exclusive talks to sell its Creditis unit to Chenavari which, as part of the process, has committed to buy unsold shares in Carige's capital raising for up to 40 million euros.
Creditis is worth 100-110 million euros, the Italian press reported on Tuesday.
The bank said underwriters Credit Suisse, Deutsche Bank and Barclays had renewed their support for the cash call and were confident it would succeed.
Carige had to delay the launch of the stock issue due to last-minute difficulties in securing backing from underwriters.
The board on Monday also approved the sale of 1.2 billion euros in bad debts and the lender's debt servicing platform to bad loan specialist Credit Fondiario, controlled by Tages Group, another hedge fund with offices in London and Milan.
The bad loan disposal, which CEO Paolo Fiorentino is set to conclude on Tuesday, was one of the conditions set by underwriters for their commitment. ($1 = 0.8428 euros) (Reporting by Valentina Za, editing by Louise Heavens)