The deal, which was agreed this week, will lead to Creacorp taking on €14.7m (£11.4m) of loans owed by Nipson in exchange for a 41.82% stake, via the acquisition of around 23m Nipson shares owned by Polar.

Polar, which will maintain a 10% stake in Nipson following the deal, has also agreed to pay €2.2m owed by Nipson's main French trading unit, Nipson SAS, to Bank Hapoalim.

Creacorp will reportedly pay €1 for the loan assignments and call option.

News of the debt-for-equity swap came after the UK-listed Nipson announced Q3 sales of £7.4m, a £700,000 increase on the same quarter last year, which brought total sales for the first nine months to £21.4m.

In its pre-close statement, the company, which made a pre-tax loss of £3m on the first six months of this year, revealed that Nipson SAS was under "sever financial constraints" and that a restructuring plan was in the process of being defined.

Nipson said: "It is not possible to determine at this time if the restructuring plan will be sufficient to redress the situation. The continued losses of the French company and the increase in the Group's activity require additional funding of its working capital beyond the levels agreed with its bankers and its major shareholder, Polar.

"The Company has been working with Polar for some time to secure additional sources of financing for the business. The company is currently in discussion with third parties concerning an equity-debt transaction."