Vacuum cleaner manufacturer Hoover is reportedly in “intensive” talks with the Pension Protection Fund and The Pensions Regulator to offload its pension scheme into the lifeboat fund.

The Sunday Times has reported that the company, based in Wales but owned by Italy’s Candy Group, wants to cut ties with its 7,800 member pension scheme as it is struggling to survive. For the 18 months to June 2015, the company made a pre-tax loss of £6.2m on sales of £240.6m.

In addition, for the same period, Hoover reported a pension deficit of £194.1m, however, the paper reports that the buyout deficit is around £450m to £500m and a rescue would cost the PPF £250m. At the last valuation of the scheme in 2013, the trustees demanded annual payments of £5m to repair the deficit.

A move to the PPF would result in at least a 10 per cent cut in the pensions of members of the scheme below retirement age.

The British business of Hoover, which was established in 1908 in Ohio by William Hoover, has struggled to recover from a promotion in the 1990s where it offered free return flights to customers who spent over £100 on its products.

Its British and European operations were sold to Candy in 1995, resulting in factory closures in the UK, with the majority of production moved to China. Hoover in Britain is now a distribution and marketing business with 500 staff.

A move to the PPF for its pension scheme would be done through a regulated apportionment arrangement, something which is only considered if the regulator believes the alternative option is the collapse of the company.

A source said that if the business is able to sever ties with its pension scheme then it will be viable. Hoover told the paper that it had “for some time been working collaboratively with the pension scheme trustees and The Pensions Regulator to find a long-term solution to the deficit” in its main final salary scheme. Talks were “ongoing” and the day-to-day operations of the business were “not affected”, it added.

The PPF told the paper: “In the event of an insolvency at a company with an eligible pension scheme, members can be reassured that we are there to protect them.”

The Pensions Regulator said to Pensions Age: “We do not comment on individual companies or pension schemes unless it is appropriate to do so.”

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