Creditors are poised to seize control of Hibu, the Reading-based owner of Yellow Pages, in a deal which would wipe out shareholders and more than halve its £2 billion debt pile, The Sunday Times reported.
The debt-for-equity plan would see more than 300 creditors become new owners of the former FTSE 100 Index group, which last year changed its name from Yell.
The group has been hampered by slumping revenues amid intense competition from internet search engines, while it staggers under a heavy debt pile built up by an overseas acquisition spree.
Hibu had debts of more than £2 billion at the end of 2012, and the deal with lenders is expected to see them write off as much as £1.5 billion in return for ownership of the business. That would see the group, which has about 13,000 employees, quit the stock market.
Much of its debt matures next April, and Hibu has said its shares are likely to have "little or no value". Its creditors reportedly include Soros Fund Management and Deutsche Bank.
The group, which earned revenues of £1.6 billion in the year to the end of March 2012, has a stock market value of just £9.5 million.
It has about 1.2 million customers and its operations span the UK, US, Spain and parts of Latin America. It has been rolling out its eMarketplace, which provides small businesses with the infrastructure to sell online without having to set up their own website, as it battles slumping print revenues.
The company declined to comment.