MILAN, April 6 (Reuters) - Italian fashion designer Roberto Cavalli has agreed to renew a licence for financially troubled IT Holding to make and distribute clothes for his Just Cavalli brand, a source close to the matter said on Monday.
The licence, held by IT Holding's Ittierre unit, was to expire in 2010 and Cavalli has agreed to extend it for another four years, the source told Reuters on condition of anonymity.
"The draft of the agreement is subject to approval by the ministry of ecomonic development and the court of Isernia," the source said, confirming a report by Milano Finanza newspaper on Saturday.
The court of the south Italy town of Isernia is responsible for the jurisdiction where IT Holding is based.
Both Ittierre and IT Holding are under special administration. No one at either company was available for comment.
Ittierre's difficulties forced Cavalli to cancel his Just Cavalli catwalk show during Milan's fashion week in February.
The Just Cavalli licence was worth 240 million euros a year and represented more than half of Ittierre's sales, according to Milano Finanza.
Just Cavalli is a younger, more informal line for which British model Kate Moss has modelled.
Ittierre also has licences for VJC Versace, Galliano and C'N'C Costume National fashion lines.
IT Holding, which also owns the Gianfranco Ferre and Malo brands, is looking for a way out of special administration and is seen considering refocusing on production licences through Ittierre.
Last week, another unit called IT Holding Finance SA, the issuer of a senior bond due in 2012, went into special administration. (Reporting by Cristina Carlevaro; Writing by Gilles Castonguay; Editing by Greg Mahlich)