Barclays is one of the banks selling their Connaught loans to hedge funds specialising in distressed debt

Connaught’s lenders, including Barclays, have started selling their loans to the company at a cut price.

As one of the distressed firm’s bankers, Barclays sold its £19m loan on Monday for just 37p per share according to the Financial Times.

The loan is understood to have been sold to a number of hedge funds that specialise in distressed debt investing.

Barclays, which is part of Connaught’s syndicate of banks led by the Royal Bank of Scotland, is one of the first to sell its loans. Other members include Lloyds Banking Group and Bank of Ireland.

Allied Irish Bank, a member of the original lender group, is believed to have sold its loans to another member of the syndicate according to the FT.