Iconic guitar company Gibson could be facing bankruptcy

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Iconic guitar brand Gibson whose Les Paul and SG guitars have graced rock stages around the world could be facing bankruptcy, it has emerged.

Founded in 1902 in Michigan, the company has seen stars including Slash, Bob Marley and Santana strumming some of their solid body electric guitars.

The company’s chief financial officer, Bill Lawrence, left after less than a year in the job, and just six months before $375m (£267m) of senior secured notes are due to mature, according to the Nashville Post.

Musicians Bono, Slash, Steven Tyler and Allison Krauss perform with a Gibson guitar Iconic guitar company Gibson could be facing bankruptcy Iconic guitar company Gibson could be facing bankruptcy skynews gibson guitar bono 4234907
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Bono, Steven Tyler, Allison Krauss, and Slash – armed with his Les Paul – perform on stage

The paper also says that if the notes are not refinanced by 23 July, a further $145m (£103m) in bank loans will immediately become due.

Gibson has hired investment bank Jefferies to help them with their financial situation.

CEO Henry Juszkiewicz now faces a limited amount of time to decide whether to exchange the debt, attempt to pay it off using his equity or try to declare the company bankrupt.

Mr Juszkiewicz told Nashville Business Journal the company was “monetizing assets like stock holdings, real property and business segments… to reduce debt and generate funds to contribute to business segments that are thriving”.

The Who's Pete Townsend performing in 1976 Iconic guitar company Gibson could be facing bankruptcy Iconic guitar company Gibson could be facing bankruptcy skynews pete townsend the who 4234906
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The Who’s Pete Townshend performing with his Les Paul in 1976

Gibson makes annual sales of more than $1bn (£713m), and has three US production facilities.

The Nashville headquarters produce solid-body electric guitars; the Memphis plant produces semi-hollow electric guitars – including the Gibson ES line – and a factory in Bozeman, Montana, makes acoustic guitars.

Gibson guitars range from just under $500 (£356) for a standard electric guitar, up to top of the range custom-made models for around $23,500 (£16,747).

The Who’s Pete Townsend famously smashed his Les Paul Gold Top Deluxe on stage in 1976, and the shattered remains can be viewed at the Victoria & Albert Museum in central London.



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