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Future Group’s creditors are exploring options to recover more than $2.5 billion in loans, amid worries the Indian retailer’s planned sale of assets to Reliance Industries could fail, four bankers with knowledge of the matter said.

Future may face liquidation if the deal, already mired in legal wrangling, falls through and banks are actively discussing an alternate one-time restructuring option that could include an easier repayment tenure and fresh capital infusion, the people said on condition of anonymity as the talks are private.

“Without Reliance, there is no future for Future,” one of the bankers at a major state-owned lender said.

Bankers have discussed a restructuring plan in the past week and are drawing up a blueprint, the sources said.

Future’s top financial creditors include India’s largest lender State Bank of India, along with smaller rivals Bank of Baroda and Bank of India.

The three banks, Future Group and Reliance did not immediately respond to requests for comment.

Future, India’s No.2 retailer with more than 1,700 stores, has been hit hard by the pandemic and agreed to sell most of its retail assets to Mukesh Ambani-led Reliance in a $3.4 billion deal.

The transaction, however, has faced legal hurdles with e-commerce giant Amazon.com alleging that Future, by agreeing to sell assets to Reliance, was violating terms of a deal the U.S. firm had struck with a Future Group entity.

Future denies any wrongdoing.

The deal was temporarily blocked by a New Delhi court but subsequently the order was struck down. Amazon has now taken the matter to India’s Supreme Court.

The Future-Reliance deal will help creditors recover up to 80% of their dues, the four bankers estimate.

The troubled retailer’s over $2.5 billion debt includes loans from banks and money owed to operational creditors.

‘BLEAK SCENARIO’

Future, which last year availed a loan moratorium amid the pandemic, has since defaulted on repayments, the sources said.

The defaults, coupled with the legal battle, are now forcing banks to seriously explore a one-time restructuring plan under an inter-creditor agreement signed last year, they added.

“Even though the restructuring plan was discussed in the 3-4 meetings we had, we hadn’t given it much thought because it was always plan B. Now with the Reliance deal stuck, we need to take it seriously,” a second banker said.

Although the restructuring plan is still being firmed up, it may include providing easier repayment options to Future, including a moratorium for a few quarters, the bankers said.

Banks may also look at conversion of debt to equity, two of the bankers said.

The plan being discussed, however, would need Future to bring a “sizeable” amount of capital to the table and need lenders to pump in fresh funds, the two bankers added.

“One’s looking at a very bleak scenario because there’s no cash flow happening at Future,” the first banker said, adding lenders are wary about putting in more money into the retailer.