* Sorgenia gross financial debt 1.863 bln euros at end-Jan
* Debt payments suspended with banks 61 mln euros end-Jan
* Financial autonomy 1 month if credit lines not renewed
(Recasts, adds detail, background, byline)
By Stephen Jewkes
MILAN, Feb 17 Italian energy company Sorgenia,
controlled by holding company CIR, hopes to strike a
deal soon with lender banks to freeze payments on its debt as it
seeks to turn around its loss-making business.
In recent months creditor banks have cancelled or frozen
credit lines at Sorgenia, which is seeking a six-month freeze on
debt payments to help it address a lack of growth and high
"If the credit lines are not renewed... Sorgenia could have
financial autonomy of around one month," CIR said.
Sorgenia, 46 percent owned by Austrian utility Verbund
, has already presented a new business plan to help
start the debt restructuring process.
The company, which has financial debt of almost 1.9 billion
euros ($2.6 billion) along with a further 304 million euros in
endorsement debt, generates electricity and sells power and gas.
It has invested heavily in gas-fired power plants at a time
when demand has languished because of the economic downturn and
CIR, controlled by the Italian De Benedetti family, said
that the curtailment and cancellation of loans by the banks
meant only one cash facility was currently available its unit.
"The situation is naturally causing considerable financial
stress which, should it continue over time, could prejudice
Sorgenia group's ability to conduct its business activity," it
The debt repayments suspended by Sorgenia with its creditor
banks totaled 60.7 million euros at the end of January.
CIR said it was ready to do its part in the restructuring
process under certain circumstances. Earlier this month Verbund
rejected Sorgenia's call for funds.
Sorgenia's new 2014-2020 plan will focus on its core power
generation business, while selling all its renewable energy
assets as well as its exploration and production business.
Sorgenia holds 39 percent of power generation company
Tirreno Power which had a debt pile of about 875 million euros
at the end of January.
"To date Sorgenia has no commitment to support the financial
and capital restructuring of Tirreno Power," CIR said.
($1 = 0.7298 euros)
(Reporting by Stephen Jewkes; Editing by Steve Scherer and Eric