By This Is Money Reporter
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Yellow Pages owner Hibu is reportedly on the brink of being seized by lenders in a deal set to wipe out shareholders.
Hibu - which changed its name from Yell last year - is in talks over a complex debt-for-equity deal that will see creditors such as Wall Street hedge funds and banks take control of the phone books giant, according to The Sunday Times.
It is believed the agreement will reduce its debts from around ?2.3billion to less than ?1billion.
Trading history: Yell borrowed heavily to fund a raft of overseas acquisitions before the credit crunch struck and has also fallen foul of competition from internet search rivals
Once listed on the FTSE 100 Index, Hibu is now worth a fraction of its former ?5billion market value.
The group, which has 13,000 staff, borrowed heavily to fund a raft of overseas acquisitions before the credit crunch struck and has also fallen foul of competition from internet search rivals, such as Google, which has slashed earnings.
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It is thought the debt restructuring details will be announced when it reports annual results on Thursday.
Hibu had 1.2million small firms as customers and revenues of ?1.6billion in the year to the end of March last year.
But it is struggling to sustain interest payments on its mammoth debts, said to be more than ?150million a year.
The firm has already warned that any debt restructuring deal would likely leave investors with little or no value on their shares.
Shareholders have already seen the value of the stock decimated - with shares worth just 0.3p, having plunged by 85 per cent in the past year alone.
Hibu's biggest creditors are thought to include Soros Fund Management, Deutsche Bank and US private equity firm Blackstone.
Hibu declined to comment.
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