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Italy's RCS closer to life-saving cash call after bank deal
May 30, 2013 / 10:08 AM / 4 years ago

Italy's RCS closer to life-saving cash call after bank deal

MILAN, May 30 (Reuters) - RCS MediaGroup got closer to a life-saving cash call after banks agreed to soften the terms of a 600 million-euro ($780 million) refinancing deal for the debt-laden Italian publisher, sending its shares higher.

Shareholders in RCS, which publishes influential Italian daily Corriere della Sera, are expected to approve a 400 million-euro rights issue when they gather on Thursday to vote on the move.

Some shareholders had criticised the initial terms of the refinancing deal with creditors and had threatened to vote against the capital increase unless those terms were improved.

The cash call needs the backing of two thirds of shareholders. So far a group of investors controlling around 50 percent of RCS have said they will approve the rights issue.

Under a turnaround plan drawn up by new chief executive Pietro Scott Jovane, RCS plans to raise the cash by end July.

The company has said the rights issue is needed to continue running as a business. A capital hike for a minimum amount of 380 million euros is also a condition of the bank deal.

AT 0956 GMT, shares in RCS were up 1 percent at 0.72 euros after earlier rising as much as 2.5 percent.

The indebted group has been hit hard by the economic crisis that has rattled Europe and ended 2012 with a loss for the second straight year, with margins squeezed by a rapid fall in advertising and circulation sales. ($1 = 0.7712 euros)

Reporting By Claudia Cristoferi and Danilo Masoni, editing by Silvia Aloisi

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