BrightHouse is being circled by a consortium of bondholders as pressure mounts on the rent-to-own retailer to strike a refinancing deal.

The business is racing to refinance £220m of bonds that are due next year and owner Vision Capital is expected to kick-start a formal sale process this month after retaining adviser Rothschild.

But according to The Sunday Telegraph, a consortium of bondholders are preparing to table a debt-for-equity swap deal “in the coming weeks”.

The move could squeeze out Vision Capital, which acquired the business 10 years ago.

BrightHouse, which operates through 280 stores, rents out household items such as washing machines, fridges and furniture.

But recent rule changes in the sector have forced the business to make amendments to its customer sign-up procedure.

The process now includes more detailed assessments of customer’s incomes and their spending, following a wider FCA probe into the rent-to-own sector.

In June, BrightHouse posted a 79.1% slump in profits to £11.7m in the year to March.

It said lower numbers of customer sign-ups and a consequent decline in the number of customers signing contracts had dented its bottom line.