Gaming group Gala Coral is reportedly negotiating its debt to enable it free up cash to invest in the business.

Reports said the group is seeking a debt-for-equity swap and is currently holding talks with its private equity backers to persuade them to give up some of their stake in the company to its debt holders.

The group is said to be indebted to the tune of £2.7 billion.

The move is likely to free up millions of pounds which could be invested in the business, although such a move is not allowed under the restrictive terms of its loan agreement.

Reports added that an agreement between Gala’s three private equity backers and a syndicate of 50 financial institutions was being brokered by the group’s adviser, Lazard.

The 50 financial institutions own about £550 million of the debt.

The remaining is held by the Gala’s bank and would not be affected by any deal.