Reed Elsevier, the publisher that shelved plans to sell its business information division last year amid collapsing valuations, is close to securing a forward-start agreement to extend about $2bn of loan debt by three years.

The deal, which will see Reed pay up to 225 basis points more than the London interbank rate to the banks that have agreed to commit, is expected to close in the next few weeks.

The lending banks include Barclays and Royal Bank of Scotland. The company declined to comment.

Forward-start facilities, which have become popular amid restrictive lending conditions, involve inviting existing lenders to be part of a group of banks extending the life of their loan commitments. The process is work-able for healthy companies, not in breach of their existing credit agreements and conditions typically include higher interest rates and fees and one-off payments.

The news comes as a postal ballot for strike action was sent out to employees at the company’s subsidiary Reed Business Information UK, which publishes titles such as the New Scientist, Estate’s Gazette and Farmers Weekly.

The dispute centres on editorial changes including redundancies and comes as many media companies are looking to reduce their cost base amid a depressed advertising market and the migration of readers to the internet.

Last year the company withdrew from a lengthy sale process to dispose of RBI amid the economic deterioration.

Indications of interest for RBI, whose titles also include Variety, fell from £1.3bn to £650m and were heading lower, according to two people familiar with the deal, as the economy weakened and RBI’s trading outlook deteriorated.

Proceeds from the sale of RBI were expected to pay debt following the group’s $4.1bn acquisition of Choicepoint, an insurance industry service provider.

Reed has about $5bn of debt to refinance before 2012 and must repay $2bn of ChoicePoint acquisition financing in March 2010 and $2.2bn a year later. Reed’s $3bn committed back-up bank lines expire in May 2010.

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