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Group holding bulk of Gibson' s debt willing to restructure if CEO Henry Juszkiewicz steps down
As Gibson's deadlines to meet its financial obligations inch closer, the group that holds the bulk of the guitar company's debt has said it's willing to restructure its deal, but there's a condition: Gibson's current CEO, Henry Juszkiewicz, cannot remain in charge.
Unnamed sources tell Bloomberg that they don't think Gibson will be able to bring in the necessary funds by July, when their notes are due, and the creditors don't want to invest any more money while Juszkiewicz remains at the helm. They've come up with a deal that would put control of the company in the hands of the bondholders and reduce the management's ownership stake. However, Juszkiewicz has said that he has no plans to cede control of the company he's run since 1986.
Rather than work with the bondholders, who he claims have "have other intentions that are not necessarily my intentions," Juszkiewicz has enlisted Jeffries Group LLC to work on a refinancing package that will wipe out the existing debt. Currently, they have a $375 million bond due on July 23, and it will trigger $145 million to be added to that total if it's not paid in full by then.
Bloomberg says that a good portion of that debt comes from an attempt to branch out into consumer electronics that didn't pan out as they had hoped, while Juszkiewicz placed the blame on the music retail industry's inability to fully recover from the economic crisis in 2008, adding that guitar stores could improve sales if they shifted their focus from catering to regular customers to making new ones feel welcome.
http://ultimateclassicrock.com/gibson-guitars-change-leaders/
Unnamed sources tell Bloomberg that they don't think Gibson will be able to bring in the necessary funds by July, when their notes are due, and the creditors don't want to invest any more money while Juszkiewicz remains at the helm. They've come up with a deal that would put control of the company in the hands of the bondholders and reduce the management's ownership stake. However, Juszkiewicz has said that he has no plans to cede control of the company he's run since 1986.
Rather than work with the bondholders, who he claims have "have other intentions that are not necessarily my intentions," Juszkiewicz has enlisted Jeffries Group LLC to work on a refinancing package that will wipe out the existing debt. Currently, they have a $375 million bond due on July 23, and it will trigger $145 million to be added to that total if it's not paid in full by then.
Bloomberg says that a good portion of that debt comes from an attempt to branch out into consumer electronics that didn't pan out as they had hoped, while Juszkiewicz placed the blame on the music retail industry's inability to fully recover from the economic crisis in 2008, adding that guitar stores could improve sales if they shifted their focus from catering to regular customers to making new ones feel welcome.
http://ultimateclassicrock.com/gibson-guitars-change-leaders/
8 replies
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= new reply since forum marked as read
https://www.youtube.com/user/AndertonsMusic
They cover every in-and-out of Epiphone versus Gibson, Mexican Strats versus American made, Paul Reed Smith versus PRS-SE, etc.
What I like about their videos is that they explain why, in detail, one guitar might be a better choice than another.
Epiphones are absolutely nowhere near Gibsons in resale value, and I also own a Gibson Les Paul Custom that I purchased in the 80s, so I'm a little jaded when it comes to anything else.
That said, given Gibson's ever-shifting reputation in recent years, I'd view your statement that there is "nothing like a USA Les Paul" through the lens of when it was made, the model, etc. They have absolutely had some production issues.
Is there anything better than my Les Paul? In my opinion, no.
If a musician is shopping around for a guitar right now, there are a lot of options, and I'd look into those options before buying something in Gibson's current price range.
They cover every in-and-out of Epiphone versus Gibson, Mexican Strats versus American made, Paul Reed Smith versus PRS-SE, etc.
What I like about their videos is that they explain why, in detail, one guitar might be a better choice than another.
Epiphones are absolutely nowhere near Gibsons in resale value, and I also own a Gibson Les Paul Custom that I purchased in the 80s, so I'm a little jaded when it comes to anything else.
That said, given Gibson's ever-shifting reputation in recent years, I'd view your statement that there is "nothing like a USA Les Paul" through the lens of when it was made, the model, etc. They have absolutely had some production issues.
Is there anything better than my Les Paul? In my opinion, no.
If a musician is shopping around for a guitar right now, there are a lot of options, and I'd look into those options before buying something in Gibson's current price range.
