Jane Norman’s lenders are to take over the business and restructure its debts of almost £136m.
The deal is designed to put Jane Norman on a sounder financial footing, The Financial Times reported.
Under the terms of the deal syndicate of 11 lenders, including Royal Bank of Scotland, will take an 80% stake in the business in return for resetting the retailer’s covenants and waiving debt repayments until March 2011. The retailer will also pay a higher interest rate on some borrowings.
Jane Norman’s management will retain a 20% stake in the business, which was bought by bust Icelandic investors Baugur and bank Kaupthing in 2005 for £117m.