Guitar Center Inc, America’s largest retailer of musical instruments and equipment, filed for bankruptcy on Saturday, as music lovers shifted their online shopping during the coronavirus pandemic.
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The retailer has negotiated for total financing of $ 375 million from accounts receivable in possession of its existing lenders and intends to raise $ 335 million in new senior secured notes, the company said in a statement.
Earlier this month, the company reached a restructuring deal with key stakeholders, which includes debt reduction of nearly $ 800 million and new equity investments of up to $ 165 million to recapitalize the society.
In a court filing, the company said it had between $ 1 billion and $ 10 billion in assets and liabilities.
GUITAR CENTER ENTER INTO A RESTRUCTURING OFFER TO CUT $ 800M DEBT
Guitar Center, which has nearly 300 stores across the country, said business operations will continue uninterrupted.
Milbank LLP served as legal counsel, BRG served as restructuring advisor and Houlihan Lokey served as financial advisor to the company.
Guitar Center began in 1959 as a store selling home organs in Hollywood.
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The company filed for Chapter 11 bankruptcy in United States bankruptcy court for the Eastern District of Virginia.
(Reporting by Radhika Anilkumar in Bengaluru; Editing by Lincoln Feast.)