Rebel bondholders agree to Phoenix deal

* Bondholders vote in favour of 15 pct face value reduction

* Brings end to months-long dispute over debt plans

* Phoenix is largest UK consolidator of closed life funds

LONDON, April 22 (Reuters) - Phoenix Group, the British life insurer formerly known as Pearl, said on Thursday bondholders had voted in favour of the company's efforts to negotiate a cut in its debt, bringing an end to a protracted dispute.

Phoenix PGHE.AS said 99.9 percent of the votes cast were in favour of a proposal that cuts the face value of a 500 million pound ($769 million) bond by 15 percent, smaller than the 25 percent originally envisaged. The votes, at a meeting earlier on Thursday, represented 83.2 percent of the Tier 1 notes outstanding.

London-based Phoenix, an acquirer and consolidator of British closed life funds built up by entrepreneur Hugh Osmond, co-founder of the Pizza Express restaurant chain, incurred heavy debts to finance its takeover of rival Resolution in 2007.

Last year, the company negotiated a financial overhaul under which its banks wrote off 14 percent of their loans, while its shareholders sacrificed 70 percent of their holdings.

Thursday's proposal has also been backed by its banks and the financial regulator.

Phoenix was acquired by an Amsterdam-listed cash shell as part of the shake-up, giving the privately held group a stock market listing for the first time, and it is now seeking a primary listing in London.

The earlier proposal for a 25 percent reduction in the face value of the bond was rejected by the bondholders in January. [ID:nLDE6061DY] (Reporting by Clara Ferreira-Marques, editing by Will Waterman) ($1=.6501 Pound)