In sad turn of events, Gibson Brands Inc., the American company that has supplied some of the world’s biggest stars with the best instrument is facing financial difficulties after years of challenges and is said to be nearing bankruptcy. Famous guitarists like Santana, Slash and Bob Marley are among the list of stars that have got the Les Paul and SG guitars in Gibson’s 116 year history. As per the report in the Nashville Post, the company which makes annual revenue of over $1 billion, is less than six months away from $375m of senior secured notes reaching maturity. If these notes that were issued in 2013 are not refinanced by July 23 then another $145 million in banks will be due immediately. After working for just six months, the company’s chief financial officer, Bill Lawrence departed from the company just recently.
On Thursday, Gibson issued a statement, many days after the Post report was published, in which the company says that “has met all current obligations to the bondholders, is in the process of arranging a new credit facility to replace the bonds, and fully expects the bonds to be refinanced in the ordinary course of business.” Besides, the owner and CEO of the company, Henry Juszkiewicz told the Nashville Business Journal: “We have been monetizing assets like stock holdings, real property and business segments that could not achieve the level of success we expected. By monetizing these assets, we can reduce debt and generate funds to contribute to business segments that are thriving. It is important to our business to get back to the financial success we had to achieve the best financial terms in the refinancing of our company.”
The company is meanwhile in the process of selling several off its real estate holdings, although those are not enough to meet the funds required to right the ship.