Published on February 16th, 2018 | by Alan Cross0
Gibson Guitars is on the verge of bankruptcy
Gibson, the manufacturer of guitars and musical instruments, brought in revenues of $1 billion last year but is still headed for bankruptcy.
The problem is debt. Two rounds of debt–one of $375 million and other of $145 million–need to be refinanced by July 23. If that can’t happen, those debts come due immediately.
“This year is critical and they are running out of time — rapidly,” said Kevin Cassidy, a senior credit officer at Moody’s Investors Service who downgraded Gibson’s debt rating last summer. “And if this ends in bankruptcy, he will give up the entire company.”
“Some type of restructuring will be necessary,” Cassidy said. “The core business is a very stable business, and a sustainable one. But you have a balance sheet problem and an operational problem.”