Isosceles, which bought Gateway Group for pounds 2.2bn in 1989, has persuaded banks owed pounds 1.1bn and mezzanine debt providers owed pounds 300m to agree to a repayment standstill until 28 May.
About pounds 80m of debt and interest payments will be deferred, and the banks have agreed to lend Isosceles up to pounds 30m of working capital to help it trade through the spring.
Meanwhile, it will try and thrash out what it calls a 'radical debt restucturing' with its adviser Hill Samuel and lead banker Midland Group. This will be its third reorganisation following one 18 months after it bought Gateway and a second signed in October.
Alistair Mitchell-Innes, who stands down as Isosceles' chief executive when David Simons joins from Storehouse next month, said that the deal would involve banks and mezzanine lenders converting much of their debt into equity.
He would not say how much, but indications from the market are that at least a third of the bank debt will have to be converted.
Klesh & Co, the broking firm that specialises in trading the debt of troubled companies, says that there are no investors interested in buying Isosceles debt at any price above 60p in the pound.
Mr Mitchell-Innes said that although the Christmas season had started late, sales in recent days were extremely encouraging. He added that the group would meet the forecast given to bankers earlier this year.Reuse content