Creditors are preparing to take control of Hibu, the publisher of the Yellow Pages, a move that will remove shareholders in the firm.
Hibu, the UK-based telephone directory publisher, is currently holding talks with the lenders over a debt-for-equity exchange deal.
The firm, which owes money to about 200 banks and investors, has £2.3bn of net debt and for long, has been struggling to make payments.
It has been facing tough competition from online service providers such as Google.
The latest deal may lessen its current net debt to about £800m and is likely to be announced alongside its financial-year results later this week.
Last year, Yell changed its name to Hibu. It has more than 13,000 employees. The company borrowed heavily in order to make overseas acquisitions.
Its biggest lenders are believed to include Deutsche Bank, private investment firm Blackstone.