A group of suppliers owed a total of EUR200 million by bankrupt Italian fashion group IT Holding SpA now wants to spearhead an acquisition and revival of the group, and hopes to file an offer by the end of the month, a person familiar with the situation said Friday.

Athena Consorzio, a newly-created consortium set up by the suppliers who represent almost a third of IT Holding's debt, will be ready to present an offer to take the company out of bankruptcy as soon as court-appointed administrators provide updated financial information, the person said.

Athena wants to set up a vehicle, capitalized by allied financial investors, to buy the whole group, which includes the Ferre label and Malo cashmere brand, which otherwise are slated to be auctioned off individually, the person said.

Court-appointed administrators are already looking for buyers of IT Holding assets, and last month said they would sell the group's brands on a one-by-one basis.

But Athena's plan may trump that approach, especially as it keeps more jobs and will likely be viewed favorably by the government, the person said.

IT Holding administrators, who are being advised by Mediobanca SpA (MB.MI) and Milan boutique firm Sin&rgetica, are due to meet Industry Minister Claudio Scajola on Monday to report on their plans to restructure the company. An updated report on the company's assets and liabilities should be released as early as next week.

Given uncertainty about such things as the true value of unsold cashmere jerseys in warehouses, it will then take Athena--which is being advised by General Electric Co.' (GE) Interbanca corporate banking unit--a few days to define its own bid.

The equity bid will likely be between EUR50 million and EUR120 million, the person said.

The cash would come from a financial partner, of whom there were many interested candidates. "I don't have to knock hard on doors," the person said, adding there were at least 10 serious candidates, some of which have well-known apparel brands of their own.

Key to the bid is that the suppliers, whose EUR200 million in combined credits stem largely from unpaid bills, would be able to provide working capital to the revived IT Holding at better terms than a bank loan, in part by loosening payment schedules, the person said.

The idea of a supplier-led buyout resembles a management buyout, and could set a precedent in an economy such as Italy's, where most companies are small.

"The supplier firms obviously have an extra interest in resolving their lost credits as their own survival depends on what happens to the company," the person said.

Other IT Holding creditors include investors with around EUR300 million in bonds and Italian banks with around EUR100 million.

Given the scale of job losses during the current recession and persistent pressure on Italy's sprawling textile sector--which generates almost one million jobs in the country--politicians will likely favor any deal that tries to keep operations local.

The governor of Molise, the region where IT Holding is headquartered, said on a local television network last month that his administration would consider injecting equity into any project that kept the company as a going concern.

"We have a dialogue with all the decision makers" controlling IT Holding's destiny, the person said. "There's a high possibility for us" to prevail and keep the company together if the administrators' valuation "is in line with what we think," the person added.

-By Christopher Emsden, Dow Jones Newswires; +39 06 69766921; chris.emsden@dowjones.com
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