Risanamento settles legal row with Milanosesto over building site

MILAN Mon Feb 24, 2014 10:55am EST

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MILAN Feb 24 (Reuters) - Italian property group Risanamento said on Monday it had reached an agreement with real estate firm Milanosesto to settle a legal dispute related to the sale and cleaning up of a former industrial site on the outskirts of Milan.

Under the agreement, Milanosesto will drop a request it had submitted to a Milan court on Feb. 10 seeking the seizure of up to 228 million euros ($313 million) in assets belonging to Risanamento and its Immobiliare Cascina Rubina unit.

The decision will be one less burden for debt-heavy Risanamento, which was the biggest Italian real estate casualty of the credit crunch of 2009, when falling property prices and the end of easy bank lending made its large debts hard to sustain.

Shares in Risanamento were up 2.65 percent by 1347 GMT, against a flat Italian all-share stock index.

The shares rallied 19 percent last week as investors bet on an offer by U.S. investment fund Colony Capital for Risanamento.

Milanosesto has agreed to pay 60 million euros, plus the value-added tax (VAT) on that amount, to Immobiliare Cascina Rubina.

In return, the latter will shoulder up to 80 million euros, plus the corresponding VAT, in extra costs for the clean-up of the site it sold to Milanosesto in 2010.

The building site used to host the Falck steel factory.

Immobiliare Cascina Rubina will pay the balance between the two sums agreed in the settlement - 20 million euros plus VAT - by the end of September 2018, Risanamento said in a statement. ($1 = 0.7275 euros) (Reporting by Francesca Landini; Editing by Susan Fenton)

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