House of Fraser has asked Lloyds Banking Group to increase its share in the department store chain as part of a property deal.
The retailer has asked the bank to consider swapping a property loan of almost £65m into equity, according to the Sunday Telegraph.
If Lloyds agrees it will end up owning a significantly increased stake in House of Fraser. It owns a 5.5% stake currently.
It is unclear if Lloyds will agree to the deal, although one source told the paper that a deal was “within an inch” of being completed.
Other major shareholders include Icelandic bank Landsbanki, which holds a 33% stake inherited by collapsed investment firm Baugur.
The retailer’s property company had debts of £64.7m in January, which House of Fraser’s board wants to get rid of to boost performance.
House of Fraser declined to comment.