Gibson Is On The Edge Of Bankruptcy
Gibson is weeks away from a forced bankruptcy, according to multiple reports and analysts familiar with the company. “At the end of the day, someone will take control of this company – be it the debtors or the bondholders,” Debtwire reporter Reshmi Basu told the Nashville Post. “This has been a long time coming.”
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Guitar and musical instrument manufacturer Gibson is on the edge of bankruptcy, despite $1 billion in annual revenues.
After just a year on the job, CFO Bill Lawrence has exited the company months before $375 million of senior secured notes will mature alongside a $145 million in bank loans that come due immediately if the notes are not refinanced by July 23. Refinancing on these notes, which were issued in 2013, seems increasingly unlikely according to analysts.
“This year is critical and they are running out of time — rapidly,” said Kevin Cassidy, a senior credit officer at Moody’s Investors Service who downgraded Gibson’s debt rating last summer. “And if this ends in bankruptcy, he will give up the entire company.”
“Some type of restructuring will be necessary,” Cassidy said. “The core business is a very stable business, and a sustainable one. But you have a balance sheet problem and an operational problem.”
Good. With all the companies Juszkiewicz purchased and dissolved, I fine with it.
I don’t get the whole idea of consolidation for the sake of dissolving. First I thought it’s some kind of race with Yamaha but when I saw Yamaha growing Steinberg/Cubase and Gibson shutting down Cakewalk, I don’t think I understand. The whole Philips stuff – I don’t get it either. What’s the goal and vision behind it in the first place? I think stakeholders and industry business people would like to understand it.
What will happen to the other brands that are connected with Gibson?
Will they go under along with the parent company?
Takira