The NSO Group is considering closing its Pegasus spyware unit for sale Business and Economic News

The U.S. is blacklisting a scandal-filled NSO list, adding pressure to the company, which has to repay $ 450 million in loans.

NSO Group Ltd., a scandal-ridden spyware company at risk of paying its debts, is exploring options such as closing the controversial Pegasus unit and selling the entire company, according to people familiar with the matter.

There have been talks with various investment funds about moves that include refinancing or full sale, citizens said, and asked that the discussions not be identified because they are private. The company has brought in consultants from Moelis & Co. to help, and the lender said they are receiving advice from Willkie Farr & Gallagher’s lawyers.

Among the new owners are two U.S. funds that have discussed taking control and closing Pegasus, one person said. Under that scenario, the funds would inject about $ 200 million into new capital to turn the knowledge behind Pegasus into a strictly defensive cybersecurity service, and perhaps to develop the Israeli company’s drone technology, one person said.

A NSO spokeswoman in Herzliya declined to comment. A Moelis representative in New York City said the company had declined to comment. A Willkie Farr representative did not immediately respond to requests for comment. Debtwire reported the elements of the potential transaction earlier.

Pegasus software can track the user’s cell phone, and misuse of it has placed the NSO at the center of privacy and human rights violations. The product was allegedly given to governments that allegedly used it to spy on political dissidents, journalists and human rights activists. Pegasus has also been reportedly used in recent months to hack the cell phones of at least nine State Department employees.

The company said it is enforcing the law and selling it to government agencies to prevent technology crime and terrorism, and has ended contracts with customers who abused them. However, the U.S. Department of Commerce blacklisted the NSO, saying in November it wanted to reverse the decision, “considering that our technologies support the interests and policies of U.S. national security.”

Apple Inc. has sued the NSO in an attempt to prevent the spyware company from using its products and services, and said it will begin notifying users who are targeted by state-protected hacking.

U.S. cuts have put additional pressure on the NSO, which is expected to repay about $ 450 billion in debt, two years after a management acquisition cost the company about $ 1 billion. Moody’s Investors Service said there was a higher risk of the company breaking its loan terms last month.

A $ 300 million loan granted by the NSO in 2019 was trading at a low $ 70-cent bid in November. It was quoted on Monday in a 50-cent dollar offer, according to people familiar with the price.

Closing the Pegasus could leave the NSO as a much smaller business and may be of lesser value, as the unit takes up about half of the NSO’s revenue. The company expects to record about $ 230 million in sales this year, one person said, 8% less than in 2018.