According to the Financial Times, accounts filed yesterday (August 25th) show that the two parties have held discussions regarding the possibility of introducing a debt-for-equity swap deal in an effort to restructure the company's balance sheet.
The report noted that "the introduction of significant additional equity by new equity investors" may also be an option for debt-laden Admiral, which was found to have breached banking covenants.
"Discussions have taken place between the interested parties," it stated, adding that a debt-for-equity deal is the most likely outcome.
Lloyds revealed earlier this month that it made a loss of $6.52 billion in the opening six months of 2009, a fall from the $4.56 billion proforma profit it recorded in the same period last year.
Written by Asim Shah