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British gym chain Fitness First is close to agreeing a debt-for-equity swap that will see existing private equity owner BC Partners give up its stake, two sources with knowledge of the process said on Friday.

Distressed investment funds Marathon and Oaktree Capital, which own the majority of Fitness First's 600 million pound ($972 million) debt, presented a restructuring plan at a meeting on Thursday and a deal could be reached as early as next week, the sources said.

The lenders will own 75 percent of Fitness First's equity in return for writing down the 600 million pound loans to zero.

The remaining 25 percent of equity will be held by parties willing to provide a new 100 million pound credit facility, underwritten by Marathon and Oaktree.

BC Partners will also receive a "small" upside in the company's equity by receiving warrants to buy shares, the sources said.

Fitness First and BC Partners declined to comment.

Marathon and Oaktree acquired over 75 percent of the Fitness First's debt at a discount in the past few months with the aim of acquiring the business, which suffered under a fall in discretionary spending.

Last month, lenders agreed to forbear interest payments on the loans for three months to finalise the restructuring.

BC Partners bought Fitness First in 2005 for 1.2 billion euros ($1.6 billion). It tried to float the Australian and Asian operations in Singapore in 2011 but pulled the process due to market volatility.