Estate agent Foxtons in debt-for-equity talks -paper

LONDON, April 12 (Reuters) - Heavily indebted UK real estate agent Foxtons is in talks with banks over a deal that would see the lenders write off some of its debt in return for a stake in the company, according to a Sunday newspaper report.

The Observer said that the banks have agreed in principle with Foxtons' private equity owner BC Partners to write off between 60 million and 90 million pounds.

BC Partners bought Foxtons for about 390 million pounds ($574.4 million) in May 2007, shortly before the UK housing market slumped. The deal was backed by 260 million pounds of debt supplied by Japanese bank Mizuho (8411.T: Quote, Profile, Research) and Bank of America (BAC.N: Quote, Profile, Research). BC Partners was not immediately available for comment on Sunday.

BC Partners managing partner Andrew Newington told Reuters last month that while Foxtons had breached covenants of its bank debt, it was still trading profitably. [ID:nLO504488]

UK house prices have fallen by more than 20 percent since their peak in 2007 and although recent data has shown a let-up in the pace of decline, analysts expect prices to continue falling this year. [ID:nL3614376] ($1=.6789 pounds) (Reporting by Victoria Bryan; editing by Mike Nesbit)