Philips Sound Distributor Facing Bankruptcy
Gibson Brands the Company that distributes Philips sound products worldwide is facing bankruptcy a move that could hurt Powermove the local distributor if it happens.
Parent Company Gibson who appear to be in trouble, was made famous by their guitars which were used by big name musicians Chuck Berry, Marc Bolan, Eric Clapton, Sheryl Crow, Bob Dylan, The Edge, Dave Grohl, Jimi Hendrix and the Beatles.
Now the iconic brand is that had a big marquee at CES is under threat.
The Company recently lost its CFO Bill Lawrence after less than a year, and the company owes $375 million in secured notes which are due to be paid later this year.
$16.6 million has been recently repaid on those notes, which were issued in 2013.
If the rest of the money cannot be repaid by July 23, another $145 million in bank loans will become due immediately.
The move could be a blow to Adelaide based distributor Powermove who have the rights to distribute the Gibson Brands Philips products in Australia.
Late last week the company issued a statement that said: “Gibson Brands, Inc […] has met all current obligations to the bondholders, is in the process of arranging a new credit facility to replace the bonds, and fully expects the bonds to be refinanced in the ordinary course of business. ”
The CEO Henry Juszkiewicz told the Nashville Business Journal “by monetizing these assets, we can reduce debt and generate funds to contribute to business segments that are thriving.
It is important to our business to get back to the financial success we had to achieve the best financial terms in the refinancing of our company.”
Gibson, which has annual revenues of more than $1 billion has to refinance the loans by mid-July, the report said.
CEO Henry Juszkiewicz is thought to be in a race against time to decide whether to exchange the company’s debt, look to try and pay it off using his equity or try to declare the company bankrupt.
The U.S.-based company has hired investment bank Jeffries to help with its current financial situation.
On Thursday, Gibson issued a statement that said an ongoing streamlining strategy would soon help it record the “best financial results the company has seen in its history within the next year.”
It also said the firm would have the ability to pay back the company’s debt in whole within seven years.