All but three of the banks have agreed to relax a funding standstill. The Bank of England is said to have exerted pressure on one, a Japanese bank.
A source close to the negotiations said he hoped all the banks would agree by the weekend. The overdue final accounts for last year could then be released without qualification.
The terms of the pounds 44m of convertible bonds give their holders an option to sell them back to the company on 30 October at 133 per cent of their initial value.
If the last banks fall into line, Ratners will have enough room in existing facilities to pay the bondholders.
But the funding will be conditional on several requirements, including gross profit margins being maintained on a month-by-month basis.
Once this obstacle was overcome Ratners would be able to continue its strategy of cutting costs, closing up to 75 shops this year and changing the name of the Ratners stores. After the peak Christmas trading period the banks would consider refinancing the company.
The banks are impressed with Gerald Ratner, the chief executive, and want him to stay on.
The standstill on bank facilities started when Ratners issued a profits warning in January and predicted an exceptional item of pounds 45m for 1991. That is now expected to have doubled.Reuse content