UPDATE 1-Thomson SA to continue debt talks-source

* Thomson SA to continue debt talks beyond Tuesday - source

* Company spokeswoman declines comment

(Adds details, background, shares)

By Julien Ponthus and Dominique Vidalon

PARIS, June 15 (Reuters) - French media technology group Thomson SA (TMS.PA) will continue talks with creditors to finalise a debt restructuring deal crucial to its survival beyond the Tuesday deadline, a source close to the matter said on Monday.

A Thomson SA spokeswoman declined to comment.

The company breached its debt covenants and has been in talks since February with its main creditors, who are owed 2.9 billion euros ($4.03 billion) to restructure its balance sheet, which showed negative shareholder equity of 134 million euros at the end of 2008.

The supplier of set-top boxes, DVDs, and video and telecoms equipment had been set a deadline of June 16 to reach a deal or face the risk of bankruptcy.

The source told Reuters that the overall framework of an agreement had been reached, but that "the talks will continue to finalise a deal".

The company has not given much detail on the talks with creditors, but Chief Executive Frederic Rose has said they have covered several options, including the possibility of banks exchanging debt for equity.

French daily newspaper La Tribune said on its website last Friday that Thomson SA would get more time to talk to its creditors.

Thomson SA also declined to comment on that report, saying only that it was sticking to its plan of making a statement on its debt talks on June 16, the day it holds its shareholders meeting.

Thomson SA, which competes with Siemens (SIEGn.DE) and Sony Corp (6758.T), has been hit by a weak operating performance and loss-making activities that have burnt through its cash pile.

Thomson SA shares were up 4.69 percent at 0.82 euros in afternoon trade, giving it a market capitalisation of around 212 million euros. Its shares have fallen around 18 percent so far this year, having plunged 90 percent last year.

In order to cut its debt, Thomson SA has vowed to sell businesses that contributed around one billion euros to 2008 sales, including Grass Valley, advertising unit PRN and cinema advertising unit Screenvision. To see a FACTBOX on key facts about Thomson SA, click on [ID:nLT1015289]. To see a FACTBOX on Thomson debt and covenants, click on [ID:nLT1006891]. ($1=.7203 euros) (Reporting by Julien Ponthus and Dominique Vidalon)