Gibson Guitars to be saved? Under threat company responds to bankruptcy fears
For over 100 years one of the forewords in the guitar industry was Gibson. Their iconic guitars have been played by some of the biggest rock stars all around the world, but we’ve learned that the company is on the edge of bankruptcy.
Earlier this week Far Out reported the news that the end of Gibson was closer than we think, in the Nashville post they said: “the situation facing the iconic Nashville-based music instrument maker, which has annual revenues of more than $1 billion, is far from normal. CFO Bill Lawrence recently left the company after less than a year on the job and just six months before $375 million of senior secured notes will mature…On top of that, another $145 million in bank loans will come due immediately if those notes, issued in 2013, are not refinanced by July 23rd…”
However, in a new statement issued by Gibson Chairman and CEO Henry Juszkiewicz, the situation may appear slightly more optimistic, he said: “these bonds expire as all fixed income instruments do at the end of their term” before noting that, as previously defined, the company is working closely with Jefferies investment bank to “manage the refinancing process.”
“While the musical instrument and pro audio segments have been profitable and growing, they are still below the level of success we saw several years ago,” Mr. Juszkiewicz said.
“We have been monetizing assets like stock holdings, real property and business segments that could not achieve the level of success we expected,” Juszkiewicz continued. “By monetising these assets, we can reduce debt and generate funds to contribute to business segments that are thriving.
“With the refinancing and the improvement in operating performance from the actions that we are rolling out, we expect the company to be organised for success and growth for years to come,” Juszkiewicz concluded.
However, Gibson’s statement failed to explain which section of the company they plan to scale back.