Woolworths has devised plans to secure as much as £100 million in new loans against its successful EUK distribution business, according to reports.
This would make the loss making High Street stores easier to offload because they would be debt free.
Trevor Bish-Jones, group CEO, has already admitted Woolworths could do the splits.
Analysts predict the group will keep EUK and sell the troubled shops.
KPMG personnel are working on the refinancing. If Bish-Jones decides to sell the stores, Woolworths might have to pay potential acquirers to take them on.
However, a demerger could still be some time in the future.