2nd UPDATE:Autogrill Aims To Reduce Net Debt,Meet Commitments

Italian restaurant operator Autogrill SpA (AGL.MI) said Wednesday it is focused on reducing its debt of EUR2.14 billion and on respecting its financial commitments, moving to quell market concerns the company may have to refinance its debt amid a slowing economy.

"As previously announced, the company is focused on reducing its net indebtedness and on respecting its financial commitments," a spokesperson at Autogrill told Dow Jones Newswires.

Autogrill's management has been told to slash costs in order to reduce its debt ratio by June 30, thereby respecting its debt covenants, a person familiar with the situation said Wednesday, adding that he was moderately optimistic that the company would succeed.

Autogrill secured a credit line of about EUR1 billion in March of last year to fund the acquisition of 49.95% of Aldeasa and the purchase of 100% of World Duty Free, it said at the time. The credit line was underwritten by BNP Paribas SA (BNPQY), Intesa Sanpaolo SpA (ISP.MI), Royal Bank of Scotland Group PLC (RBS), and UniCredit SpA (UCG.MI), who acted as mandated lead arrangers and bookrunners. ING Bank and Natixis acted as mandated lead arrangers and sub-underwriters.

Autogrill's shares closed down 6.5% at EUR3.30 in Milan Wednesday, the day after a report by Milan's Equita brokerage said it thought that the slower economy would make it hard for Autogrill to respect the conditions of its debt covenants later this year.

Equita said that a slowdown in U.S. airport traffic in January prompted the brokerage to slash forecasts for earnings before interest, taxes, deprecation and amortization, or Ebitda, to EUR589 million for 2009 from a previous estimate of EUR603 million.

The lower Ebitda, according to Equita, raises the possibility that Autogrill will have to refinance.

"Autogrill must respect a covenant of a debt/Ebitda ratio of 3.5 times, and from June 30 2009 the possibility of a breach could produce the risk of refinancing," said the Equita note.

As part of the EUR1 billion credit line, Autogrill took out EUR875 million in loans, due in March 2013, which can be prolonged for one or two years, the company said March 19, 2008.

-By Jennifer Clark, Dow Jones Newswires; 39 02 5821 99 01; [e-mail]

(With reporting by Gabriele La Monica of MF-Dow Jones)