How do I create an outline in illustrator?

Hello All,
I am trying to create artwork for printing and I have been asked to save the document as an eps file.
This is the file:
I need the sbsgroup to be an outline and be transparent in the middle...how do I remove the blue from the background?
I'm quite new to illustrator, haven't used it a lot, so would appreciate any tips please.

BID,
Here is a screenshot, first the outlined letter S partially above the background, then with a copy and the original turned black underneath, then placed over the middle of the background rectangle, then the Opacity Mask mad after selecting the blackened original and the background rectangle.

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