UPDATE 1-Orco to seek up to 77 mil EUR from current shreholders

                                
 * Orco to go ahead with rights issue of up to 77 mil euros
                                
 * Unlikely to restructure debt in time for new investor
                                
 * Sees most bonds termed out
                                
 
                                
 (Adds quotes, details, share price)
                                
 by Jan Korselt
                                
 PRAGUE, Oct 1 (Reuters) - Real estate developer Orco
Property Group <ORCO.PA> <ORCOsp.PR> will seek to raise up to 77
million euros from current shareholders even if a deal with a
new investors does not materialise, Chief Executive
Jean-Francois Ott said on Thursday.
                                
 The company, which has suffered from a slump in real estate
markets in the global financial crisis, has gone through six
months of protection from creditors granted by a Paris court.
                                
 A rights issue at 7 euros per share was to be part of a plan
to raise cash from the ColOG fund managed by Colony Capital, but
that deal expires at the end of November due to Orco's failure
to reach an agreement with bondholder on a debt swap.
                                
 Ott said a new deal with bondholders was unlikely by that
time.
                                
 "It will probably be a little longer for us to make the deal
with the bondholders (than end of November)," he told Reuters in
a telephone interview.
                                
 "I do not want to mistreat Colony, but the reality of the
deal is that we always said the Orco shareholders would have
this possibility to subscribe on the same conditions," Ott said.
                                
 Last month, bondohlders rejected an offer giving them a
mixture of new stock and bonds, valued at 65.8 percent of their
411 million euro worth of debt.
                                
 Orco said it would seek an extension of the 6-month
saveguard court protection, which expired last week.
                                
 Ott said he now expected most bonds to have their maturity
extended in the court procedure.
                                
 "When it comes to the bond, as you know because we are going
to the second period of safeguard, very likely a substantial
part of it will be termed out," he said.
                                
 He said the situation in the markets has improved and there
has been interest from current investors.
                                
 "I feel quite comfortable when I see the appetite of the
existing shareholders, which was not the case six months ago,"
he said.
                                
 He said the firm would use to proceeds mainly to put fresh
money into projects, which had to be slowed or even interrupted
over the past months due to lack of financing.
                                
 Orco shares have dropped by over 90 percent since they
peaked at 3,700 crowns in 2007. The share closed 1.5 percent
down at 194 crowns ahead of the news on Thursday in Prague,
equal to 7.6 euros.
  (Writing by Jan Lopatka)