Save A Lot Debt Tumbles With Lenders Moving to Take Control

Loans tied to Save A Lot Inc. tumbled toward new lows amid talks about a restructuring that will give lenders control of the discount grocer and cut its debt by almost half.

Save A Lot, backed by private equity firm Onex Corp., is seeking a deal with lenders that would keep it out of bankruptcy, according to people with knowledge of the matter. If enough of those creditors don’t sign up, the company could opt for a pre-negotiated bankruptcy filing, the people said. They asked not to be identified discussing a private matter.

In either scenario, Onex would give ...