Gibson Brands Inc., the iconic guitar company, whose instruments have been played by legends such as Bob Marley and Jimmy Page, is singing a sad tune today.
The company is on the verge of bankruptcy and is dealing with a high level of debt. Its expansion into other products over the past few years has not worked out as expected. Gibson also saw the departure of its CFO Bill Lawrence after a relatively short period of service.
The maker of the famed Les Paul guitar has $375 million of senior secured notes which are due to mature in August. The company also has $145 million in bank loans which will become due immediately if the notes haven’t been refinanced by mid-July.
Gibson has sought the services of investment bank Jefferies and is said to be bringing back its former CFO Benson Woo to deal with its financial crisis.
The company said it is working on a new credit facility in addition to a streamlining strategy focused on identifying areas to maximize investments and to reduce less profitable ventures. Let’s hope this helps in repaying the debt and improving financial results.