A consortium of BrightHouse’s bondholders is reportedly working towards a debt-for-equity deal for the struggling business.

The rent-to-own retailer’s bondholders have set an informal deadline of November 6 to find a deal in order to restructure its balance sheet, according to Sky News.

The hedge funds involved in the prospective deal are being led by Alteri Investors, which holds approximately 30% of the retailer’s bond.

Highbridge Capital Management, HSBC and Oceanwood Capital Management are among the other bondholders involved, according to City sources.

Although the consortium of hedge funds may not reach a deal by their proposed deadline next week it emphasizes the likelihood of an imminent change of control at Brighthouse, which was ordered to repay £14.8m in compensation to customers earlier this month.

The group of hedge funds discussing a debt-for-equity swap have reportedly presented an outline of their plan to the retailer’s majority shareholder Vision Capital.

Sources close to the situation told Sky News that although “formal talks” had not yet begun, Vision Capital is likely to retain only a very small stake in the retailer if a deal is reached.

Brighthouse advisers launched a formal sale process for the business this week.

The retailer is being advised by bankers at Rothschild and PJT Partners is advising the majority of its bondholders.