Gibson guitar owners, hold on to your guitar strings. Stunning news has strummed the music world that could have a huge impact on recording and playing live music into the future.
Guitar manufacturer, Gibson Brands, Inc., the makers of the iconic “Les Paul” series of guitars, have announced that the company could possibly face bankruptcy by the summer. It’s hard to believe that with Gibson’s stamp on the music industry, that the company would be facing a possible bankruptcy after 116 years of enabling musician’s talents all over the world.
Several business mishaps helped contribute to the problem Gibson is facing. Along with the immediate departure of the company’s CFO after six months on the job, the company’s $375M of senior secured notes is about to mature, with another $145 million in bank loans that will come due by July 23 if those notes are not refinanced.
Gibson Brands, Inc. released a statement about the pending bankruptcy, “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.”
Gibson is looking forward to a possible steady cash flow soon. The company is expecting a return investment on several of the electronics companies the guitar makers purchased over the last couple of years, in hopes they will start to pay off. Gibson Brands, Inc., has also recently sold the Baldwin piano brand that was under their umbrella.
Gibson Brands, Inc. entered the music industry in 1902 and has never looked back. Iconic guitarist Les Paul, put the brand on the map and cemented the company in the industry, especially rock & roll. Some well known artist have shredded on Gibson’s since the company’s debut, and may think twice now before smashing it on stage. Artists who have preferred the Gibson line of guitars over the years include Bob Marley, Slash, Billie Joe Armstrong (Green Day), The Edge (U2), and Mick Jones (The Clash).