Blackstone Inc (BX)

[sandyraveon]

Les Paul & Angus are proud of GSO's extension...I may need to buy a Gary Clark Gibson to help!!! Please do the same this Holiday Season! RAVE ON!!! as in Stevie SRV!!!

*DJ Guitar Maker Gibson Makes Deal With GSO Capital Partners on Loan Payment

Dec 08, 2017 15:30:00 (ET)

By Soma Biswas
Famed guitar maker Gibson Brands, Inc. has reached another deal with lender GSO Capital Partners to push back a loan payment by a couple of weeks ahead of the crucial holiday selling season, according to people familiar with the matter.

GSO, the lending arm of private-equity firm Blackstone Group, pushed back the due date on a $5 million amortization payment by two weeks to Dec. 15, according to the people. At the same time, GSO waived a covenant breach tied to a minimum level of earnings before interest, taxes, depreciation and amortization for October, the people said.

GSO loaned Gibson $130 million in February after the struggling guitar maker's previous lender called its asset-based revolving loan when the company violated a debt covenant. The company is also facing a $375 million bond maturity in August 2018.

A GSO spokesperson declined to comment.

While Gibson is operating under tight liquidity currently, Christmas is its biggest selling season and historically its cash flows jump during that time.

GSO reached another arrangement with Gibson to facilitate a second loan payment by adding $6.65 million to its $70 million domestic loan to the company, and allowing Gibson to use the proceeds to make a payment due on its $60 million international loan.

Two weeks ago, the company posted improved results for the third quarter ended in September, with revenue on musical instruments up roughly 7% to $75 million, one of the people said. Overall sales declined 15% to $239 million, however, because of a sharp decline in the electronics side of the business, the person said. The company's Ebitda increased about 3.5% to over $19 million.

Moody's Investors Service downgraded the company's debt further into junk level in August, saying its capital structure is unsustainable.

Henry Juszkiewicz, owner of Gibson Brands, took the company in a new direction in recent years by acquiring home entertainment and audio equipment makers around the world, and piling on debt doing so.

In 2013, the Nashville-based company changed its name from Gibson Guitars to Gibson Brands. Among businesses the company has added are some of Royal Phillips' home entertainment systems, TEAC and Onkyo stereos.

Gibson, manufacturer of the iconic Les Paul electric guitar, also makes instruments under a number of brand names including Epiphone, Kramer and Tobias. The company also owns a number of historic brands, including Slingerland drums and Wurlitzer pianos.

Write to Soma Biswas at [e-mail]


(END) Dow Jones Newswires

December 08, 2017 15:30 ET (20:30 GMT)


Copyright (c) 2017 Dow Jones & Company, Inc.