Italy's Avio set to postpone Milan IPO -sources

MILAN, June 19 (Reuters) - Italian airplane engine parts maker Avio is set to postpone its listing on the Milan stock exchange again because of market conditions, and a final decision is expected next week, sources close to the situation said on Tuesday.

Last month, Avio - controlled by private equity fund Cinven - filed to list its ordinary shares, aiming for an initial public offering in July.

"The banks and the company will decide by the end of next week to postpone the IPO to after the summer," one of the sources said, speaking on condition of anonymity

Market conditions now would force the company to price an offer at a very steep discount, the source said. Avio had already halted filing procedures for an IPO in October, citing market volatility.

Avio has also been in talks with potential bidders including France's Safran and private equity funds CVC Capital Partners and Clessidra, although its CEO said in a newspaper interview on Monday that the company was still working on the IPO option.

Italy's state-backed Strategic Fund has also said it was interested in investing in the group.

Italian defence group Finmeccanica has a 14 percent stake in Avio. (Reporting by Elisa Anzolin Writing by Silvia Aloisi; Editing by Gary Hill)