Gibson guitar manufacturer seeking bankruptcy protection

02 May, 2018, 01:43 | Author: Darnell Patrick
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A change in control will be undergone where current stockholders like CEO, Henry Juszkiewicz, will be replaced.

The maker of the Gibson guitar has filed for bankruptcy protection after wrestling for years with debt.

A reorganisation plan filed on Tuesday will allow Gibson Brands Inc to continue operations with 135 million U.S. dollars in financing from lenders.

In a press release, Gibson Brands said, "the decision to re-focus on our core business, Musical Instruments. will assure the company's long-term stability and financial health".

Estimates of the petition say that the company is up to $500 million in debt, and the lenders have agreed to an operating, or "debtor in possession", loan of up to $135 million to fund operations. But said it would kill its Gibson Innovations unit, which makes Philips-branded headphones, speakers and other electronic accessories. Importantly, this process will be virtually invisible to customers."Fortunately, Les Paul and SG fans can breathe a sigh of relief from that news".

The Nashville company, which sells approximately 170,000 guitars in 80 nations, reached an agreement with holders of more than 69% of its senior secured notes due in 2018 and shareholders that lets it continue to operate.



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