Struggling lending business Pioneer Credit Ltd (ASX: PNC) will likely be thrown a lifeline from entities associated with US-based The Carlyle Group (NYSE: CG).

Pioneer Credit is a debt collecting business that also provides other financial services with over 160,000 customers across Australia and New Zealand. Pioneer Credit acquires and manages retail debt portfolios. With headquarters in Perth, the company also has offices in Sydney, Melbourne, Brisbane and Manila.

Until 2019, Pioneer Credit had been growing its business as a credit lender and debt collections agency.

However, earlier this year it became known that Pioneer Credit may be impacted by accounting changes. These changes would ultimately affect how the company’s debt facilities were treated by the banks supporting its loan book, including Commonwealth Bank (ASX: CBA) and Westpac Bank (ASX: WBC).

After a series of trading halts, suspensions and proposals, Pioneer Credit today announced it has entered into a scheme agreement with entities of The Carlyle Group.

“The Board of Pioneer has carefully considered a range of alternatives following an extensive process involving several parties,” Pioneer Chairman Michael Smith said.

Having completed that process, the Board has unanimously concluded that, based on the Total Cash Consideration, the Scheme is in the best interests of our shareholders, in the absence of a Superior Proposal, and is also subject to an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of Pioneer shareholders.”

The deal values Pioneer Credit shares at $120 million, the company said, before any potential benefits from franking credits could be recognised by shareholders.

The deal will now need to be approved by the Court and shareholders.