Guitar Centre - Update - Now in Chapter 11 + new debt repayment

guitars4you · November 2020

Guitar Center has entered a restructuring deal with key stakeholders to reduce its debt by nearly $800 million, the retailer said in a statement.

The company signed a Restructuring Support Agreement with its equity sponsor, a fund managed by the private equity firm Ares Management LP, a fund managed by Carlyle Group, new investors Brigade Capital Management, plus a majority of its noteholder groups.

The agreement comprises new equity investments of up to $165 million to recapitalise the company.

Guitar Center is still expected to file for Chapter 11 bankruptcy soon. They could file for bankruptcy this weekend, but stores will remain open as the company restructures.

the retail giant and its private equity owner Ares Management are planning to file a prepackaged Chapter 11 bankruptcy protection within a few days . The company’s creditors have supported the potential filing

guitars4you · November 2020

Seen so many different reports over the last 5-10 days regarding GC - Can't find the appropriate article now, but was pointing to the fact, that pre lock down, sales for the last few 1/4's were on the up

As stated earlier, GC don't have an issue with sales - They sit at the top of the sales chart for USA dealers by a considerable distance - around 3 times higher than the 2nd best placed outlet

Looks like we are now just awaiting news on the Chapter 11 package - In the long term hard to know if they will keep all 300 stores open - But for now the story is about making the debt repayment easier to handle - And all stores for now are expected to remain open

guitars4you · November 2020

Now in chapter 11 - How long it will remain in chapter 11 for will remain to be seen - But they key issue is to make the long term debt more easy to handle, without hindering the business - The CEO of GC indicated that before covid lockdown that GC had managed 10 consecutive 1/4's of growth