Private equity-backed Envision Healthcare is reportedly considering handing control over to its creditors in bankruptcy court, the Wall Street Journal reported Wednesday.

The Nashville-based multispecialty group—which at one point about 500 radiologists, according to its website—is currently exploring chapter 11 as it grapples with a heavy debt load and payer challenges. Negotiations with some lenders may lead to a restructuring that could result in PE firm KKR writing down its stake in Envision, the journal reported citing anonymous sources.

Earlier this month, the physician firm also missed a key deadline to report its financials, triggering a technical default. Envision previously issued $1.2 billion of unsecured bonds due in 2026 tied to its $6 billion purchase by KKR in 2018 (excluding debt). But those bonds were recently quoted at about 4 cents on the dollar, the report noted.

Similar stories have surfaced around Envision in previous years. In 2020, Bloomberg claimed the company was considering bankruptcy as it grappled with massive amounts of debt and no elective medical procedures to generate revenue at the height of the pandemic. And S&P analysts downgraded the company a year ago after it failed to make another financial filing deadline.

“The ratings downgrade reflects Moody's view that Envision's capital structure is unsustainable, that the probability of a bankruptcy or major restructuring is high, and that recovery rates for much of the company's debt will be low,” the investor service said in a September update. “The company's ongoing decline in profitability, weak liquidity, and Moody's expectation that operating performance will continue to deteriorate given labor pressures impacting the industry and rising interest rates that will cause interest expense to nearly double.”

Read more from the Wall Street Journal below.

Editor's Note: This story has been updated to include the correct number of radiologists employed by Envision.