April 25, 2022—Service King is close to reaching an out-of-court deal to help address some of its debt load, according to Bloomberg Quint.
The auto collision repair company began to face major monetary trouble during last year's third quarter when Service King maxed out its sources of credit and then got a $15 million loan from sponsors in order to support its operations.
The new proposal involves bondholders led by Clearlake Capital Group taking control and bringing in $100 million. Clearlake and the company's majority owner Blackstone, Inc. declined to comment on the matter.
Service King has struggled to return to business as usual as the effects of the pandemic have resulted in a continued hardship in obtaining automotive parts and getting access to mechanics. Nevertheless, the deadline to repay Service King's debts are fast approaching.
"About $375 million of unsecured notes mature in October, and the company invoked a 30-day grace period after missing the April 1 interest payment." The article says. "Service King is required to cut its bonds outstanding to less than $135 million by July 1, or else a $775 million term loan could become due."
The company had $75 million of restricted cash to repay its notes, and according to data from Bloomberg the $775 million loan due in December 2025 is quoted at 92 cents. The 7.875 notes due in October trade at around 103 cents.
