Time Warner on Monday moved closer to a potential spin-off of AOL, its internet division, as it sought to amend the terms of $12.3bn of debt that would have blocked a transaction.

The owner of the Warner Brothers film studio and CNN has offered holders of debt that was secured by the internet division a payment of $5 for every $1,000 worth of debt and will guarantee the debt with its HBO pay-television network instead.

The consent solicitation, which ends on April 15, will cost Time Warner about $61.5m if successful.

The move is a further strong signal that Time Warner is seeking to resolve its troublesome ownership of AOL, coming a week after it officially spun off its cable services division and a day before Tim Armstrong, a former Google advertising executive, takes the reins of AOL as chief executive.

Mr Armstrong’s appointment, along with recent moves by Google, which owns a 5 per cent stake in AOL, suggests Time Warner is moving to put an end to an eight-year saga derided in the industry as one of the most value destructive mergers of all time.

“We view this announcement as significant as it clears a major hurdle to spin AOL to [Time Warner] shareholders,” Michael Nathanson, an analyst at Bernstein Research, said in a research note, adding that the news indicates Time Warner could likely announce a spin-off in the next few months.

Google, which agreed to purchase its stake in AOL for $1bn in 2005, in January exercised its rights to force a registration of its stake in AOL or have Time Warner repurchase its stake at fair market value.

Google’s stake is worth $274m, according to regulatory filings, valuing AOL at $5.5bn. Mr Nathanson said he valued a standalone AOL company at $2.4bn.

It is unclear how Time Warner would separate from AOL. AOL reorganised last year into one unit comprised of its advertising, publishing and social networks businesses; and another focused on its legacy dial-up internet services business.

Time Warner had considered a sale of the dial-up business to several parties last year, but discovered a sale would be difficult before Time Warner split the dial-up unit from the rest of AOL’s businesses.

It completed that internal split earlier this year.