ABSTRACT We present high-resolution VLT/UVES spectroscopy and a detailed analysis of the unique broad absorption-line system towards the quasar SDSS J 165252.67+265001.96. This system exhibits low-ionization metal absorption lines from the ground states and excited energy levels of Fe ii and Mn ii, and the meta-stable $2\, ^3S$ excited state of He i. The extended kinematics of the absorber encompasses three main clumps with velocity offsets of −5680, −4550, and −1770 km s−1 from the quasar emission redshift, z = 0.3509 ± 0.0003, derived from [O ii] emission. Each clump shows moderate partial covering of the background continuum source, Cf ≈ [0.53; 0.24; 0.81]. We discuss the excitation mechanisms at play in the gas, which we use to constrain the distance of the clouds from the active galactic nucleus (AGN) as well as the density, temperature, and typical sizes of the clouds. The number density is found to be nH ∼ 104 cm−3 and the temperature Te ∼ 104 K, with longitudinal cloudlet sizes of ≳0.01 pc. cloudy photoionization modelling of He i⋆, which is also produced at the interface between the neutral and ionized phases, assuming the number densities derived from Fe ii, constrains the ionization parameter to be log U ∼ −3. This corresponds to distances of a few 100 pc from the AGN. We discuss these results in the more general context of associated absorption-line systems and propose a connection between FeLoBALs and the recently identified molecular-rich intrinsic absorbers. Studies of significant samples of FeLoBALs, even though rare per se, will soon be possible due to large dedicated surveys paired with high-resolution spectroscopic follow-ups.