From the Nashville Post:
Gibson ‘running out of time — rapidly’
“Gibson Brands, Inc. today announced that the company made a $16.6 million coupon payment to holders of its $375 million, 8.875% senior secured notes due 2018.”
That simple statement issued a week ago — at all of 26 words, it’s less than a quarter the length of Gibson’s boilerplate company description that accompanied it — suggests a business-as-usual tone of a company taking care of its contractual commitments.
But 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 23.
Less than six months out from those crucial deadlines, the prospects for an orderly refinancing — Gibson has hired investment bank Jefferies to help with that — look slim, observers say. And the alternative scenarios look likely to sideline longtime owner and CEO Henry Juszkiewicz.
“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 Post this week. “This has been a long time coming.”
Sheesh - they are an American Icon. There is no need for them to have been that deeply in hock except for poor management. Annual revenues of more than $1 billion? Come on - this is no way to run a company.
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