Guitar Company Gibson said to Be Facing Bankruptcy
Long a major presence at consumer tech shows like CES, musical instrument maker Gibson is said to be “running out of time” to repair a financial situation that could lead to the company declaring bankruptcy.
Founded over 100 years ago, the Nashville-based company pulls in annual revenues of more than $1 billion, but a simple statement made at the start of the month is said to point to serious financial struggles internally. The statement, which essentially summed up what sounded like a standard contractual debt-repayment, scratches the surface of what has reportedly been a “far from normal” situation.
According to a report from Nashville Post, Gibson CFO Bill Lawrence, who had been with the company a little more than a year, left the company just a short time before some $375 million in secured notes was set to mature. On top of that, the company has another $145 million in bank loans that will come due immediately if those notes are not refinanced by July 23rd, according to the report.
Gibson has hired investment bank Jefferies in the interim to help get their financing in order, but the prospect of getting all of that done in the next five to six months before those deadlines start approaching seems slim. Options facing the company, according to some reports, include CEO Henry Juszkiewicz exchanging the company’s debt, looking to try to pay it off with his own personal equity in the company, or declaring bankruptcy.
During their recent earnings call, which followed these reports, the company said it was working on an ongoing streamlining strategy that would enable it to record “the best financial result the company has seen in its history within the next year.” Additional, Gibson said it would be able to pay off its debt in entirety.