The new owners of Leon are close to taking control of Caffe Nero after buying up the coffee chain’s debts, The Telegraph reports.

Billionaire brothers Mohsin and Zuber Issa, who are also due to find out if regulators sign off their £6.8bn acquisition of Asda this week, acquired Leon over the weekend for a reported £100m.

The Issas are understood to have bought around £140m of loans from Swiss private equity firm Partners Group via investment bank Morgan Stanley.

Buying the loans will leave them in a strong position to take control of Caffe Nero if the coffee chain were to default on its mountain of borrowing.

City sources said that Partners had written to Caffe Nero boss Gerry Ford on Friday expressing a number of concerns about the state of the company’s finances.

It is understood that Partners told Ford that Caffe Nero is at risk of breaching its banking covenants - strict rules that govern loans - and that the company will struggle to refinance £145m of senior ranking debts that are due to be repaid next year.

Last November Caffe Nero, which employs more than 6,000 people in the UK, launched a company voluntary arrangement (CVA), a radical restructuring process that allows companies to reduce rent owed to landlords.

The move was disrupted by the Issas, who submitted an eleventh-hour bid to buy the company outright. Although the swoop was rejected, the CVA remains subject to a legal challenge.

The brothers, who have built one of the world’s biggest petrol forecourt empires with private equity firm TDR Capital, were awarded a CBE in the Queen’s Birthday Honours last year after striking a deal to buy a majority stake in Asda

A spokesman for Caffe Nero said: “”We have had a successful winter and spring trading and are generating positive cash flow and are ahead of forecast for the last five months. We are forecasting no covenant issues in our projections over the next 12 months and we look forward to an even brighter future post May 17 when we open up our cafes fully to the public.”

A spokesman for the Issa brothers declined to comment.