UPDATE 1-Italy’s Salini counts on M&A-fuelled building revival plan

(Adds quotes, background) By Elisa Anzolin July 12 () – Italy’s biggest builder, Salini Impregilo, expects to receive state and bank support by Monday for its “Project Italy” plan to revive the moribund construction industry, starting with a takeover of rival Astaldi . Salini wants to become the cornerstone of an industry consolidation, aiming to secure the backing of sovereign fund Cassa Depositi e Prestiti (CDP) and commercial banks for a plan that would use mergers to create a national champion. Salini chief financial officer Massimo Ferrari told reporters on Friday he expected to receive commitments from CDP and banks to back two funding operations totalling 1.5 billion euros ($1.69 billion) which would underpin the plan. The first would be 900 million euros in bank loans to be shared by Salini and Astaldi, followed in October by a 600 million euro ($675 million) share issue by Salini, with both required to pull off a successful takeover of Astaldi. About 120,000 building firms have gone bust in Italy over the past 11 years, hurt by rising indebtedness, weak infrastructure spending and a lack of global heavyweights able to compete as head contractors on major projects. Astaldi, the country’s second largest builder behind Salini, is under bankruptcy protection. Salini also has heavy debts and fears that a failure of Astaldi could harm its own business, given both are partners in some major projects. “The fundamental point is (to keep alive) the contracts, both in the country’s interest and our own,” Ferrari said. “The contracts have multiple participants, some in profit and others not, but we need to make sure that the contracts go ahead.” Salini shares were down 2.3% in afternoon trade, while Astaldi shares were broadly unchanged. ($1 = 0.8886 euros) (Editing by Mark Bendeich and Louise Heavens)Our Standards:The Thomson Trust Principles.