The complex agreement would cut borrowing to less than a billion pounds, wiping out shareholders, the Sunday Times said citing sources.

The company, which had just over 2 billion pounds of debt as of December 31, said in February that it was in talks with lenders and expected to reach a deal on restructuring its debt "in the near future".

Hibu has repeatedly said that any deal would result in little or no value for shareholders.

The company's heavy debt load was built up in a series of acquisitions including a 3.3 billion euro deal to buy a Spanish directories business in 2006.

Like other directories publishers, Hibu has been struggling to cope with a slide in its print businesses as more people turn to the Internet for local listings.

Hibu could not be reached for comment.

Shares in the company were down 28 percent at 0.20 pence at 1022 GMT on Monday on the London Stock Exchange. Hibu shares, which traded at about 600 pence in 2007, have lost 77 percent of their value since September when the company said it had approached lenders for waivers.

(Reporting by Richa Naidu in Bangalore; Editing by Supriya Kurane)