Colonial close to debt deal: source

LONDON (Reuters) - Spain's Colonial (COL.MC) is moving towards agreeing a debt restructuring with its creditors that may include a future cash injection from shareholders and the sale of some assets, a person familiar with the situation told Reuters on Tuesday.

The 8.9 billion euro ($12.9 billion) debt restructuring may include additional cash investments by Colonial's main shareholders Banco Popular (POP.MC) and La Caixa, a savings bank, to keep the Spanish real estate company afloat, the source said.

"Things are moving in the right direction," the source said.

A debt restructuring with main creditors Goldman Sachs (GS.N), Eurohypo EHYG.DE, Calyon and Royal Bank of Scotland (RBS.L) is needed to save the company from insolvency.

"The only way to get a deal done will be if people give in," the source said, adding that negotiations over the summer have been tense as lenders wanted the company to be more pro-active.

A deal, expected within the next few weeks, is also likely to include the sale of assets such as SFL, the French unit that the company has failed to sell amid lower-than-expected bid prices, the source said.

"They have to be realistic," the source said.

Colonial, like other Spanish real estate firms such as Reyal Urbis (REYU.MC) or Habitat, is at the mercy of its lenders, which have extended temporary waivers to them.

The crisis in Spain's real estate sector is deepening as the credit crunch and the bursting of a domestic property boom are leading into a protracted slump in home sales and prices -- while inflation and unemployment are on the rise.

Martinsa Fadesa (MFAD.MC), Spain's biggest construction company, filed for the country's largest-ever administration in July, with more than 5 billion euros of debt.

(Editing by David Holmes and Quentin Bryar)