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* Banks, funds to sell some of their stakes, remain invested
* Market cap estimated at 1-1.2 billion euros - sources
* Listing planned for June 25 - sources (Adds details, outlook)
FRANKFURT, May 27 (Reuters) - German roofing company Braas Monier Building Group plans to list its shares on the Frankfurt stock exchange in a potential 500 million euro ($683 million) flotation, taking advantage of buoyant capital markets.
Banks and investment funds which took control of the company following a debt restructuring plan to sell some of their shares, the company said in a statement on Tuesday.
The listing, which would give Braas Monier a market capitalisation of about 1-1.2 billion euros, will likely take place on June 25, sources familiar with the transaction said.
The German market leader in roofing tiles made from clay or concrete was founded in 1953, prospered in Germany's reconstruction boom after World War II and later became part of French cement maker Lafarge.
In 2007, Lafarge sold the company to French buyout group PAI for 2.4 billion euros, which burdened Braas Monier with so much debt that a financial restructuring could not be avoided when building markets suffered from a global economic downturn in 2009.
Creditors such as Apollo, TowerBrook, York and BNP Paribas agreed to swap some of their debt for equity, taking control of Braas Monier and reducing its liabilities by two thirds.
After a refinancing deal struck in April 2014, Braas Monier's debt now stands at 565 million euros, comprised of a 315 million euro bond and 250 million euros in loans all due in 2020.
"Leverage remains high," ratings agency Moody's said earlier this month.
Unlike car parts maker Stabilus, which had its market debut last week and is using proceeds from the IPO to pay down debt, Braas Monier will not cut its debt burden as part of the listing.
In 2013, Braas Monier posted a net loss of 69 million euros and earnings before interest, tax, depreciation and amortisation of 84.5 million euros on sales of 1.2 billion euros.
The earnings, however, included one-off charges for restructuring of 72 million euros, which analysts are likely to exclude when valuing the firm. They are expecting the company to post an adjusted EBITDA of 200 million euros in 2014.
If valued at a multiple in line with that of listed peers, which trade at an average of about 9 times expected earnings, Braas Monier could be valued at 1.6 billion euros including debt and taking into account an IPO discount of at least 10 percent.
Braas Monier expects its business to improve this year after sales dropped 7 percent in 2013.
"We have seen a double-dip in the last five years, a harsh downturn in 2009 and another decline in 2012/2013," Chief Executive Pepyn Dinandt told Reuters.
"This year, we expect a strong recovery in Germany and in UK, while the French and Italian markets are likely to remain weak."
The company also expects its earnings to increase due to cost-cutting measures like the closure of several sites to roughly 100 today and selling its U.S. and Brazil businesses.
Braas Monier estimates it has a 28 percent market share in Germany, putting it ahead of rivals like the Creaton brand of Belgium Etex Group or the Koramic brand of Austrian Wienerberger .
In its second-largest market France it is third-placed behind rivals Imerys and Terreal.
Braas Monier employs about 7,400 staff.
BNP Paribas, JP Morgan and UBS are organising the flotation with the help of Goldman Sachs and Berenberg.
$1 = 0.7325 Euros Reporting by Arno Schuetze; editing by Thomas Atkins