Creditors of Yellow Pages parent Hibu are to take control of the company as part of its restructuring plan.
The deal is aimed at saving as many jobs as possible, although it means there will be nothing left for company shareholders.
It will cut £800m off Hibu’s debts of £2.3bn, accumulated through foreign acquisitions such as the £2.3bn purchase of Telefónica’s Spanish directory business in 2006.
In a statement to shareholders, Hibu chairman Bob Wigley, said: “Given the burden of high historic debt levels and short maturity of our existing loans lender control of Hibu was unavoidable.”
“While I fully recognise that it will be of no consolation to you in your capacity as a shareholder we will have secured the future of the group, safeguarded the jobs of our 12,000 employees and laid the foundations for a sustainable transformation to a digital business with global capability.”
Creditors of the business include George Soros’ hedge fund, US private equity group Blackstone, and European investment bank Deutsche Bank.
The deal is subject to approval of lenders holding 75% of the group’s debt and is expected to be completed by the end of the year.
The company, rebranded from Yell in 2012, reported a year-on-year sales decrease of 16% to £1.3bn for the year ending 31 March 2013, with its print and directory sales falling 22% year-on-year to £902m.
Hibu’s shares have been suspended from the London Stock Exchange today (25 July).