Creditors holding about 90 percent of Carvana Co.’s bonds have been pitching the beleaguered used-car company on ways to pare down debt and improve liquidity, including a proposal for a debt-for-equity swap, according to people with knowledge of the situation.

The group, represented by White & Case and PJT Partners, recently offered to swap a substantial amount of unsecured notes for equity in Carvana, the people said, asking not to be named discussing a private matter. The bondholders also said they would allow the company to pay some of its interest with additional debt, a feature known as payment-in-kind.

The proposal isn’t final and terms could change. Carvana has not formally engaged with the group’s offers, the people added, asking not to be identified because the matter is private.

Bondholders had earlier signaled their interest in moving their existing unsecured positions into new first-lien debt and allowing the company to pay interest in kind for two years, the people said. The plan would save Carvana more than $1 billion in cash interest, the people added. The group also offered to provide new money to the company and asked Carvana’s equity holders to inject roughly $1 billion into the business, they said.

Representatives at Carvana, one of its advisers Kirkland & Ellis, and White & Case didn’t respond to requests for comment. PJT and another Carvana adviser Moelis & Co. declined to comment.

To maintain a united front, members of the bondholder group have also agreed to extend a cooperation agreement to end of November, with the ability to extend the pact to May 2024, the people said. The group, which includes Apollo Global Management Inc. and Pacific Investment Management Co., came together last year to negotiate with Carvana in preparation for a restructuring.

Led by Chief Executive Officer Ernest Garcia III and his father, Ernie Garcia II, Carvana was one of the companies that benefited from the pandemic economy. The firm raised billions of dollars during the easy-money era to buy droves of pre-owned autos and lure buyers with cheap loans. But its fortunes turned as auto production rebounded and higher interest rates crimped consumer spending.

Carvana had earlier proposed that creditors trade $1.3 billion in debt for $1 billion in notes secured with various assets while shareholders wouldn’t suffer a loss. That exchange offer was quickly shot down by the group.

To drum up investor interest, Carvana sweetened terms of the exchange offer and extended the participation deadline to May 3. The company is now staring down at a $168 million interest payment on bonds due in May.

The company’s 10.25 percent bond due 2030 last changed hands at around 55 cents on the dollar, according to Trace. Its shares have slumped 89 percent over the past twelve months.