Yell, the debt-laden directories business, has failed to convince its lenders to approve its restructuring plan, putting its plans for a rescue rights issue under pressure.

Yell’s 300-plus lenders failed to agree a consensual deal by a deadline of 5pm today, the owner of Yellow Pages will say in a statement to the stock exchange tomorrow morning.

The company will add that, given the absence of an agreement, it will push ahead with an application to the courts to impose its restructuring plan on lenders.

However, Yell was still debating with its advisers last night whether to allow lenders one final day to reach an eleventh-hour agreement in parallel with a move to push ahead with the court application.

It is believed that just less than 90 per cent of lenders by value had agreed to the deal by today’s deadline, 5 per cent less than the number required for a consensual deal. Lenders had already been given an extra three days to sign up.

Yell’s problem is that the courts could take up to eight weeks to approve a scheme of arrangement, a process that would leave Yell’s share price in limbo until after Christmas.

The Yellow Pages business, which was floated by its private equity owners, Apax and Hicks Muse, in 2004, could risk a covenant breach in January if it does not agree a restructuring deal before then.

A period of uncertainty could be bad news for Yell, which is seeking to raise £500 million from investors to pay down its debt mountain and stabilise its financial position. Shares in the company fell again today to close 12 per cent down at 46p.

However, despite the sceptism of the markets, it is understood that Yell has been advised that the success of the scheme of arrangement, which would require the approval of only 75 per cent shareholders, is virtually certain.

Yell is asking lenders to give it longer to pay down the bulk of its debt in return for paying off £800 million within 18 months. The restructuring would see Yell pay up to an extra 1 per cent of interest on its bank debt. In return, the banks would extend the period of its outstanding loans to 2014.

Yell plans a rescue rights issue to raise £500 million from investors to fund the payoff. The other £300 million of debt would be refinanced in order to pay off existing lenders.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive