Gala Coral mezz lenders set debt plan - sources

LONDON Oct 7 (Reuters) - Britain's biggest bingo club operator Gala Coral may end up in the hands of lenders if a proposal from a group of debt holders is accepted, two sources with knowledge of the situation told Reuters.

The gaming company -- owned by private equity firms Candover (CDI.L), Cinven [CINV.UL] and Permira [PERM.UL] -- is in talks with lenders as it seeks to avoid breaching the terms of its 2.7 billion pounds ($4.29 billion) of bank debt.

Mezzanine debt holders, owed more than 500 million pounds but who rank behind about 2 billion pounds of senior debt, have put forward a proposal to restructure the company's finances, hit by Britain's smoking ban and new government taxes.

($1=.6301 Pound)

(Additional reporting by Simon Meads)