BlackRock Inc.'s HPS and Brookfield Corp.'s Oaktree Capital Management took over a firm that provides lighting, rigging and other services for Hollywood productions, wiping out as much as $900 million of debt as the global entertainment industry struggles with changing economics, according to people with knowledge of the deal.

The transaction marks a significant restructuring in the entertainment services sector, where production support companies have faced mounting pressure from shifting studio spending patterns and the rise of streaming platforms. The debt-for-equity swap effectively hands control of the servicer to the two alternative asset managers, who specialize in distressed credit and special situations investing.

Industry observers note the deal reflects broader challenges across Hollywood's below-the-line vendor ecosystem, where companies providing essential production infrastructure have seen revenues fluctuate amid content pullbacks and consolidation among major studios. The $900 million debt write-down underscores the severity of financial strain in this segment.

BlackRock and Oaktree are expected to pursue operational improvements and potential add-on acquisitions to stabilize the business, leveraging their combined expertise in credit markets and asset management to reposition the company for a recovery in production activity.