As a debt repayment deadline, slated for September, draws near senior lenders to Four Season Healthcare are working on a plan to restructure the debt.

Lenders that include Royal Bank of Scotland, Cheyne Capital, Marathon Asset Management and a Morgan Stanley Real Estate run fund were reportedly holding series of discussions recently, with the aim of engaging the company.

Four Seasons Healthcare is third largest nursing home operator in the UK. It has 333 care homes with about 17,000 beds.

But it has faced a huge refinancing of £1.2bn of its £1.5bn debt burden in three months.

Although RBS has put together a package of millions of pounds to be used in refinancing some of the debt, existing or new shareholders may have to provide new equity to repay other creditors.

It is still not clear the level discussions have reached and if there will be enough money to repay all creditors or they may need swap to some of the debt for equity.