UK fitness club operator Esporta is set to be taken over by its lenders after administrators reportedly failed to sell the business.
According to a report by the Financial Times, Société Générale, which backed property entrepreneur Simon Halabi's £476 million ($699 million; €610 million) acquisition of the chain in 2006, is in the process of a debt-for-equity swap to take control of the company.
The report cites sources close to the business, which said a deal could be concluded as soon as next week.
The chain, which has 55 clubs, was bought at the height of the buy-out boom, two and half years ago, ran into financial difficulties soon after its purchase. These difficulties were compounded by the fact that chief executive and finance director left shortly after the deal and membership levels were believed to have fallen.
Esporta's parent companies were placed in administration in 2007 after SocGen was unable to syndicate the £330m loan it provided for the transaction and failed to secure further equity from Mr Halabi.