(Recasts with statements, adds financial details)
By Claudia Cristoferi
MILAN, March 14 Italian property company
Risanamento will sell its crown jewels, nine high-end
properties in the heart of Paris, to a UK-based fund to pay off
debt and raise cash.
The board has given the final approval to an offer worth
1.23 billion euros ($1.7 billion) by Chelsfield/The Olayan
Group, Risanamento said in a statement, confirming what a source
had told Reuters earlier on Friday.
Italian bank UniCredit, a key shareholder and
creditor of the property company, had warned Risanamento's
future was at risk if the debt-laden group failed to sell its
French assets, according to a document seen by Reuters.
"The transaction will bring around 230 million euros into
the company's coffers, after having paid the debt related to the
French assets," the company said in a statement, adding it
expected to close the deal by the end of May.
Risanamento had total debt of 1.8 billion euros at the end
of September. The company declined to say how much debt the sale
would help it pay down.
The Milan-based group 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 then 3 billion
euro debt hard to sustain.
It escaped bankruptcy when a court made Italian banks Intesa
Sanpaolo and UniCredit convert debt into equity to
become its largest shareholders. The company's founder Luigi
Zunino was left with a minority 25 percent stake held through
companies under special administration.
The two banks are still the company's biggest creditors.
The French assets had drawn the interest of U.S. businessman
Tom Barrack who last month launched a joint takeover offer of
Risanamento with former owner Zunino.
The deal with Chelsfield is set to sink the joint bid, as
the two investors were mainly interested in the French assets.
However, after the sale of the assets Risanamento remains at
risk of having to renegotiate its debt with banks as two bonds
worth around 540 million euros come due by the end of this year.
($1 = 0.7180 euros)
(Writing by Francesca Landini; Editing by Paola Arosio and