Gibson's Money Woes..

Discussion in 'What's left to Talk About?' started by Rokdog, Feb 13, 2018 at 4:18 PM.

  1. Rokdog

    Rokdog Well-Known Member

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  2. Rokdog

    Rokdog Well-Known Member

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    Geert De Lombaerde

    “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.”

    That simple statement issued a week ago — at all of 26 words, it’s less than a quarter the length of Gibson’s boilerplate company description that accompanied it — suggests a business-as-usual tone of a company taking care of its contractual commitments.

    But the situation facing the iconic Nashville-based music instrument maker, which has annual revenues of more than $1 billion, is far from normal: CFO Bill Lawrence recently left the company after less than a year on the job and just six months before $375 million of senior secured notes will mature. On top of that, another $145 million in bank loans will come due immediately if those notes, issued in 2013, are not refinanced by July 23.

    Less than six months out from those crucial deadlines, the prospects for an orderly refinancing — Gibson has hired investment bank Jefferies to help with that — look slim, observers say. And the alternative scenarios look likely to sideline longtime owner and CEO Henry Juszkiewicz.

    “At the end of the day, someone will take control of this company — be it the debtors or the bondholders,” Debtwire reporter Reshmi Basu told the Post this week. “This has been a long time coming.”

    Basu said some bondholders have complained about a lack of clarity from Gibson — a situation that has not improved by the arrival of GSO Capital Partners, a unit of private equity giant Blackstone that about a year ago extended Gibson a lifeline via $130 million in loans. Basu told the Post GSO’s arrival on the scene has unsettled some bondholders, who have organized and hired financial and legal advisors to protect their interests.

    Kevin Cassidy, a senior credit officer at Moody’s Investors Service, says Juszkiewicz essentially has just three options: He and his team could negotiate an exchange of their debt coming due for new notes, which may not be feasible at a reasonable price. He also could be persuaded — or forced — to give up some of his equity in exchange for the debt payments. Or he may end up taking one of the most globally recognized brands that calls Nashville home to bankruptcy court.

    “This year is critical and they are running out of time — rapidly,” said Cassidy, who last summer downgraded Gibson’s debt rating. “And if this ends in bankruptcy, he will give up the entire company.”

    Attempts to reach Gibson executives via a spokesman this week were not successful.

    The company recently gave itself a bit of breathing room by selling a former Baldwin Piano warehouse in The Gulch for $6.4 million. It also is trying to sell the nearby Valley Arts building on Church Street, although that deal has landed in court. But those sales — the Valley Arts property will bring in about $11 million — are unlikely to make a big enough dent to stave off a painful overhaul.

    Gibson needs to report by next week its final numbers for its fiscal third quarter to stakeholders. One thing bond owners will be watching for is an improvement in the company’s electronics business, which has been built up in the past few years via debt-fueled acquisitions but has seen sales slump of late.

    Still, even a solid turnaround on that front won’t be enough for Juszkiewicz to avoid difficult conversations.

    “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.”
     
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  3. golem

    golem Well-Known Member

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    One reason why I've downsizing my collection. I suspect used prices on guitars (I own no Gibsons) will take a bit of a hit when this goes through.
     
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  4. JeffBeck

    JeffBeck Well-Known Member Staff Member

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    Sounds promising that they are predicting Henry will be forced out. Bout time.
     
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  5. AxeGlove

    AxeGlove Well-Known Member

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    Bummer. Legendary American Icon...in the hands of an acquisition crazed nitwit.
     
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  6. PsychoCid

    PsychoCid Well-Known Member

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    But I mean....

    This sort of thing has to be planned, right?

    If it goes to bankruptcy, Henry had to have purposely planned that and has some tax strategy to dodge the bullet and come out ahead.
     
  7. Tyrannocaster

    Tyrannocaster Well-Known Member

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    Good riddance. Words fail when it comes to Henry J.
     
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  8. frozensoda

    frozensoda Well-Known Member

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    Gibson’s financial situation...
    B24294E7-98A6-4AC2-9769-B893B6C03B90.jpeg
     
  9. AxeGlove

    AxeGlove Well-Known Member

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    Not me Henry is a "luddite".
     
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  10. RiverDog

    RiverDog Well-Known Member

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    No way dudes. They're totally going to make a comeback with these amazing and affordable new offerings! o_O

    LP_CBV.PNG LP_CIF.PNG LP_CMN.PNG LP_CNY.PNG LP_JM.PNG
     
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  11. uwmcscott

    uwmcscott AGF Survivor Champ

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    Been at least a couple weeks since we had a Gibson-Hater thread, you guys are slacking off.
     
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  12. RiverDog

    RiverDog Well-Known Member

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    23167929_1853115181366419_2815971464932151583_n.jpg
     
  13. nomadh

    nomadh Well-Known Member

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    Or is this a be careful what you wish for moment. Henry j sucks but who becomes the owner after him?
    Samsung, general mills, zuckerberg? Fender? Samick?
    Maybe Samick buys the name ,shuts it all down and now all gibsons are just foreign imports.
    Just look at Pacific ans see how they now own schwinn, giant, mongoose and iron horse. And about 5 others now I think.
    Are there any good options waiting in the wings?
     
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  14. nomadh

    nomadh Well-Known Member

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    Hate gibson or love gibson and hate the management. I wish gibson all the best.
    And that's not henryj
     
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  15. stevebway

    stevebway Well-Known Member

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    Well , if they go out of business all Gibsons will be worth more.
     
  16. tonebender

    tonebender Well-Known Member

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    I love Gibson guitars and hope they live on!!!
     
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  17. Partscaster

    Partscaster Well-Known Member

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    I love the 2018 Tributes.
     
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  18. PsychoCid

    PsychoCid Well-Known Member

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    Yeah, I feel like we've been down this road before the last time(s) Gibson was sold.
     
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  19. jtcnj

    jtcnj Well-Known Member

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    Companies prosper to giants, evolve, or fall all the time for a variety of reasons.

    I dont hate them, I just feel for the working folks who lose their jobs while the big shots skip away fat and happy.

    I'd like to own some Gibsons but there are tons of good used affordable guitars out there, including Gibson; I wouldnt miss them if they go under.

    I have yet to pay even close to $300 for any guitar to date, so that puts me out of the Gibson market new or used anyway.

    Unless you count the fire sale on the M2 last year, or end 2016 maybe.
    I dont understand the marketing there into their own Epiphone market.

    But, I almost grabbed one of those, and thats probably why. Although I would only even consider it at the fire sale price, under $250. if I recall. I think Tiga here paid like $229.

    I sometimes wish I would have, but then the stripped down product is no better than some of what I have except for what perceived value the Gibson label on the headstock would have to me.
     
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  20. Rokdog

    Rokdog Well-Known Member

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    I've got nothing against the Gibson brand as I have 4 of my own,
    though as a perceived Industry leader their management is a joke and will sink the ship if not righted
     
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