Blackstone Inc.’s Service King Collision Repair Centers Inc. has started talks with creditors about restructuring the company’s debt, which could include a potential chapter 11 filing, WSJ Pro Bankruptcy reported. Lenders in the company’s $775 million term loan have signed nondisclosure agreements with the company to begin negotiations ahead of a looming debt maturity due in July. The restructuring plans may change and the company may be able to restructure its debts out of court. The automotive collision-repair business has struggled since the onset of the pandemic due to lower collision volumes and higher labor costs. Those headwinds have continued despite higher roadway traffic in 2021. Service King also has faced setbacks after implementing new operating systems. The company has been working to conserve cash since last fall when it elected to defer cash payments to term lenders and instead tack on additional debt to the loan balance and also drew down on a revolving line of bank credit.
