Beleaguered Japanese supermarket operator Daiei is in heated discussions with its three principal banks over how best to turn the company around.

The banks have proposed that Daiei seek assistance from the state-funded Industrial Revitalisation Corporation of Japan (IRCJ), reported Yomiuri Shimbun. However, Daiei has presented an alternative plan which involves seeking investment from private companies and restructuring its operations to concentrate on food-oriented supermarkets.

Daiei is desperate to retain its independence and receive financial assistance without help from the IRCJ. Its plan foresees other retailers being invited to sell clothes and other products in its existing commercial buildings, while the company itself will focus on food.

If the IRCJ gets involved, Daiei will have to shed some of its employees, reported the newspaper, and also sell off all its non-core businesses, including OMC Card Inc., whose rising share price has contributed significantly to company profits on a consolidated basis.

It is not clear whether the three main creditor banks will be swayed by Daiei’s argument.