Following last week’s reports that Gibson is rapidly running out of time to resolve debt issues and could be facing bankruptcy, the guitar maker has responded to the reports with a statement insisting the company will see “success for years to come”.
Last week, Nashville Post reported that CFO Bill Lawrence left the company after less than a year on the job and just six months before $375 million of senior secured notes will mature.
The report said that Gibson, which has annual revenues of more than $1 billion, has another $145 million in bank loans that will be due immediately if those senior secured notes are not refinanced by July 23rd.
Financing experts suggested that the company was rapidly running out of time, with one even believing that chairman and CEO Henry Juszkiewicz could “give up the entire company”.
Gibson has now released a statement regarding the rumours, insisting that it is in the process of refinancing its bonds and expects to have replaced finances by the debt deadline.
“These bonds expire as all fixed income instruments do at the end of their term. While the musical instrument and pro audio segments have been profitable and growing, they are still below the level of success we saw several years ago,” said Juszkiewicz.
“We have been monetising assets like stock holdings, real property and business segments that could not achieve the level of success we expected. By monetising 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,” he continued.
The CEO concluded by saying the company is working hard to improve results and won’t be going anywhere as soon as the reports suggest.
“With the refinancing and the improvement in operating performance from the actions that we are rolling out, we expect the company to be organised for success and growth for years to come.”