The American musical instrument manufacturer, best known for manufacturing guitars, Gibson is facing bankruptcy after 116 years of being in business. According to the Nashville Post, the company, which has annual revenues of more than $1 billion, has to deal with upcoming repayments totaling $375 million, with a further $145 million due if the first amount is not serviced by July 23.
The Post reports, Gibson’s chief financial officer, Bill Lawrence, left after six months on the job. The departure of Lawrence was seen as a bad sign for a company trying to re-organise.
Gibson, the parent company of the widespread guitar brand and a variety of consumer audio products, issued a news release. The release declared that it has met all current obligations to the bondholders, is in the process of positioning a new credit facility to replace the bonds, and fully expects the bonds to be refinanced in the regular course of business.
Gibson is required to report by next week to stakeholders of its final numbers for its fiscal third quarter. The one thing bondholders will be looking for is an improvement in the company’s electronics business, which has been built up in the past few years via debt-fueled acquisitions but has seen sales fall of late.
Having been a primary brand among various musical instruments since 1902, Gibson recently moved out of its Nashville warehouse, where it had operated since the mid-1980s.
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