* EVN hopes to raise 173 million eur in share issue
* Will use capital to strengthen balance sheet
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VIENNA, Oct 28 (Reuters) - Austrian utility EVN AG priced a delayed 173 million euro ($240 million) rights issue on Thursday at 11 euros per share and said it would use the capital to strengthen its balance sheet and fund renewable projects.
The pre-placement period for institutional investors started on Thursday while the subscription period for the 16.4 million new shares will begin on Friday.
EVN said it would offer the new shares on a 1-for-10 basis until Nov. 12.
The shares were trading down 3.2 percent at 11.50 euros by 1515 GMT.
"All new shares were successfully placed in the pre-placement to institutional investors," EVN said in a statement.
The capital will also allow EVN to retain its interest in Verbund when the latter issues shares worth about 1 billion euros around the middle of November.
The holding company of the Lower Austria province will fully subscribe to retain its 51 percent stake, EVN said. German stakeholder EnBW, which holds a 36 percent stake at present, will not exercise its subscription rights, meaning that its stake will be diluted.
The sale was delayed because EnBW pulled out of the original plan. It had wanted to sell most of its stake on the market and said the original offer price of 10.50 euros was too low.
Deutsche Bank and Raiffeisen Centrobank are acting as joint bookrunners and lead managers for the offering. (Reporting by Sylvia Westall; Editing by Erica Billingham)