The NSO Group, the Israeli cyber security firm that's known for its controversial Pegasus unit, is looking to sell the entire company and shut down operations, reported Bloomberg, citing people familiar with the matter.

The company, which has been embroiled in scandals and lawsuits, is at the risk of defaulting on its debts, said the report, adding that it has been in talks with investment funds for either refinancing its existing debt, or barring that an outright sale.

According to the report, two US-based funds that are in the running to take over the company have already discussed shutting down the Pegasus unit. In return, they'll be investing $200 million in the company to turn Pegasus into a strictly defense-oriented cyber security service, it said.

The notorious spyware allowed clients of NSO, which the company claims to be legitimate governments, to comprehensively spy on their targets. Once on a mobile device through an unsecured link or dropped WhatsApp video call, even encrypted messaging apps are not secure. Pegasus sees messages, tracks call logs, user activity through apps, gathers location data of the device, can access the camera, and listen in through the microphone.

>>Pegasus row: How much does it cost to use the spyware?

However instead of terror threats, recent journalistic investigations found that NSO clients were using the spyware to keep tabs on political opponents, human rights activists, lawyers and journalists.

The Pegasus Project, as the investigation was named, alleged that in India the spyware was used to spy on ministers, opposition leaders, political strategists and tacticians, journalists, activists, minority leaders, Supreme Court judges, religious leaders, administrators like Election Commissioners and heads of Central Bureau of Investigation (CBI).

In response to the allegations, the Supreme Court of India ordered an independent probe in the matter in October.

The group has a debt of about $450 million. The company had been bailed out by a management buyout just two years ago which saw it being valued at nearly $1 billion.