UPDATE 2-Autogrill plans 600 mln euro cash call after virus wrecks sector

* Aims to rebalance financial structure after debt doubles

* Cash call equals almost half current market value

* Shares fall as much as 15% (Adds debt, reference to bank covenants)

MILAN, Jan 21 (Reuters) - Italian caterer Autogrill is planning to raise up to 600 million euros ($729 million) with a sale of new shares to strengthen its balance sheet and seize potential opportunities in its pandemic-battered sector, the company said on Thursday.

Shares in the group, which has burnt through cash by keeping half its outlets open in deserted airports and on highways with no cars, plunged as much as 15% after it announced it would seek to raise almost half its current market value from shareholders.

“We are starting a journey aimed at strengthening our capital structure, to be financially ready and flexible to take advantage of any potential future opportunities,” Autogrill Chief Executive Gianmario Tondato Da Ruos said in a statement.

The company said it aimed to complete the capital increase by the end of June.

A company source told Reuters that the rights issue would allow the group to restore the financial flexibility it had before the coronavirus crisis.

Autogrill in June reached an accord with creditor banks for a temporary suspension of periodic checks on key debt ratios to avoid pandemic-driven breaches of lending agreements.

Citi analysts said that 600 million euros should be enough “for both liquidity and (debt) covenant purposes, assuming some trading recovery through the year”.

The cash would also allow Autogrill to pursue opportunities to grow its business, the source added without ruling out potential merger and acquisition activity.

Autogrill’s shares closed 13.3% down at 4.36 euros, with Bestinver equity research analyst Marco Opipari citing the “dilutive effect of the capital increase”.

Separately the Benetton family holding company Edizione, Autogrill’s top investor with a 50.1% stake, said it welcomed and would buy into the planned capital increase.

Citigroup, Credit Suisse and Mediobanca are expected to be part of a banking consortium that will handle the proposed rights issue, two sources familiar with the matter said.

Autogrill, like its rivals, has been hit hard by the COVID-19 pandemic and its effects on global leisure and business travel.

The company’s sales fell 56% in the first eight months of 2020, and in November it took a 300 million euro loan backed by a state guarantee..

Debt nearly doubled to 1 billion euros in the first half of 2020 while core profit shrank to 52 million euros from 454 million in the same period a year earlier. ($1 = 0.8235 euros) (Additional reporting by Giancarlo Navach Editing by David Goodman)