Key facts
- BlackRock's HPS Investment Partners and Oaktree Capital Management have taken control of MBS Group.
- The firms converted debt into equity, wiping out as much as $900 million.
- An additional $40 million in new funding has been committed to MBS Group.
- MBS Group provides production services to over 600 entertainment locations worldwide.
- B. Riley Financial secured a $160 million debt facility from Oaktree.
BlackRock Inc.’s HPS Investment Partners and Brookfield Corp.’s Oaktree Capital Management have taken control of MBS Group, a firm providing services for Hollywood productions, after it defaulted on its debt. The firms converted hundreds of millions of dollars in debt, potentially up to $900 million, into equity and committed an additional $40 million in new funding to support the company's operations and turnaround efforts.
MBS Group, which serves over 600 entertainment locations globally, relies on steady cash flow and access to financing for its equipment, such as lighting and camera rigs. The debt-for-equity swap is a common strategy for creditors to gain ownership of a distressed business and attempt to recover value.
Separately, B. Riley Financial announced a new $160 million senior secured debt facility provided by funds managed by Oaktree Capital Management. B. Riley used a portion of this facility to retire existing debt and the remainder for working capital, including its investment in a joint venture overseeing the liquidation of JOANN, the fabric and crafts retailer.
In another development, Oaktree Capital Management, in a letter to investors, blamed Silver Lake and Advent International for the bankruptcy of Amazon aggregator Thrasio, with whom they had previously partnered on deals.