Buyout firm Bain Capital is set to suffer a loss of up to €400m ($590m) on its investment in Bavaria Yachtbau, as it hands over control of the yacht maker to two distressed debt investors in one of the largest debt-for-equity transactions since the start of the credit crisis.

US-based special situation investors Oaktree Capital Management and Anchorage Advisors will take equity equal stakes in Bavaria Yachtbau after buying its debt for about €300m ($441m). The handover will happen in the next day or so, sources close to both sides said.