2nd UPDATE:Prada Approached By Funds;Negotiates Debt Payment

Italian luxury-goods company Prada SpA said Thursday it has received expressions of interest from potential investors for a stake in the company but said no negotiations are underway.

The company also said it is in talks to extend the payment of its debts with several banks, as the ongoing economic downturn has prompted luxury companies worldwide to find ways to shore up its capital.

"The company received expressions of interest from different private equity funds," a spokesman for Prada said.

The statement follows a Milano Finanza article saying the company was scouting an outside investor to fuel growth and take up to a 40% stake in the firm's capital structure.

A source familiar with the matter said one of those potential investors was buyout firm Investindustrial.

In the fiscal year ending Jan. 31, 2009, Prada said net investment totaled EUR158.7 million, while its net financial indebtedness amounted to EUR537.4 million.

Prada, which is 95% owned by the Prada family and designer Miuccia Prada's husband, Chief Executive Patrizio Bertelli, shelved its third attempt to go public in 2008, with the economic crisis gripping the luxury sector.

The company recently said it isn't interested in a public listing in the near term but it is still a strategic option.

"We are not pressed to sell shares in an IPO, and we want to wait for the right moment," said Miuccia Prada in an interview with CNN in June.

A spokesman from Prada confirmed that the company is renegotiating the term of payment of its debt with UniCredit and Intesa Sanpaolo and other banks to free capital in order to invest in development of opening new stores.

Prada opened its capital to outside investors in 2006, when it sold a 5% stake to Intesa Sanpaolo.

Prada's holding company is also in negotiations to renegotiate the term of payment EUR600 million of debt, a source said.

Prada, founded in 1913, now has 238 directly operated stores worldwide.

-By Sofia Celeste, Dow Jones Newswires; +39 06 69766920; sofia.celeste@dowjones.com

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