(Adds details)MILAN, July 23 (Reuters) - Italy's depositor protection fundon Tuesday kicked off a 900 million euro rescue process fortroubled bank Carige via the conversion of around 313million euros ($350 million) of a bond into shares.Genoa-based Carige, weakened by decades of mismanagement,
risks collapse as a result of bad loans accumulated duringItaly's recession that followed the global financial crisis adecade ago.The bonds will be converted into shares worth the sameamount, the fund's managing director Giuseppe Boccuzzi said,adding that the rescue plan envisaged a 700 million euro rightsissue by Carige and a new convertible bond for 200 millioneuros.Along with the fund, which is financed by Italian banks, therights issue will be supported by cooperative lender CassaCentrale Banca for around 70 million euros and Carige's currentshareholders for an amount of up to 150 million euros.
The fund, known as FITD, will step in to subscribe to anypart of the rights issue which Carige's shareholders do not takeup, Boccuzzi said.The remaining part of the right issue, around 160 millioneuros, will also be covered by FITD.The convertible bond is expected to be sold tostate-controlled banks Mediocredito Centrale and CreditoSportivo.After at least two bailout plans fell through, the EuropeCentral Bank has given Carige until July 25 to come up with asolution. But source familiar with the situation said thedeadline could be extended by a few days as the rescue plan wasnow being put in place.
($1 = 0.8948 euros) (Reporting by Stefano Bernabei, writing by Giulio Piovaccari,editing by Francesca Landini and Jane Merriman)