Struggling Italian clothing company Stefanel said on Friday it was in talks with private equity funds Oxy Capital and Attestor Capital over a deal that would hand them majority ownership of the group.

In a statement, the company said that its creditor banks had raised no objections so far to a possible deal, although an agreement had not been finalised yet. The banks would also become shareholders in the company through a debt-to-equity swap, it said.

The fashion group accumulated over 170 million euros 181 million) in losses over the last decade while attempting to reach out to mid-range clients while surviving competition from high-street brands like H&M and ITX.MC.

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Stefanel said the accord would only go through if the Italian market watchdog would lift Oxy Capital and Attestor Capital from having to launch a full takeover bid on the Treviso-based company.