(Bloomberg) — Spirit Airlines Inc. is closing in on a deal with creditors that would restructure its crushing debt load in bankruptcy court after discussions for a tie-up with rival Frontier Group Holdings Inc. fell apart.

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Spirit said in a filing late Tuesday that it’s in advanced talks with a super majority of its secured noteholders to hammer out a restructuring. That would be carried out in a Chapter 11 bankruptcy process, according to people with knowledge of the matter, who asked not to be identified discussing private talks.

An agreement with creditors is “expected to lead to the cancellation of the company’s existing equity,” Spirit said in the filing.

Spirit’s shares plunged as much as 65% at 9:44 a.m. in New York on Wednesday, the stock’s largest intraday decline on record.

Representatives for Spirit and Frontier declined to comment. Spirit Airlines had been in talks with Frontier about filing for bankruptcy as a way to facilitate a takeover by the rival discount carrier, Bloomberg previously reported. The Wall Street Journal reported Tuesday that Spirit’s merger talks with Frontier had broken down.

The developments raise “the risk of customers booking away from the airline, resulting in even greater pressure on liquidity,” Tom Fitzgerald, an analyst with TD Cowen, said in a note. “In the event of a restructuring, focus will then shift to the fate of Spirit’s fleet. We expect the airline to sell off the remaining encumbered assets to pay off the associated debt on the aircraft.”

The ultradiscount airline has been struggling to find a way forward after its proposed takeover by JetBlue Airways Corp. was blocked on antitrust grounds earlier this year. Negotiations with bondholders over the terms of a potential bankruptcy or out-of-court restructuring have been underway for months.

Spirit’s creditors include holders of about $1 billion in so-called loyalty bonds — 8% notes due 2025 that are backed by claims on elements of the company’s frequent-flyer program — and $500 million in unsecured convertible bonds due 2026.

The plan under negotiation is not expected to impair general unsecured creditors, employees, customers, vendors, suppliers or aircraft lessors, or the holders of its secured debt backed by aircraft, according to the company’s statement.

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