Guitar Center has announced it has completed “a series of transactions to address its April 2020 debt payments.”
The announcement follows the news that the musical instrument retail giant had skipped payment on two of its bonds, according to an anonymous source. The same source also revealed its debt totalled $1.2 billion as of February. A recent statement from Guitar Center paints a more optimistic picture, however: “These transactions provide near-term liquidity to help navigate challenges encountered during the COVID-19 pandemic and were made possible through the support of each of Guitar Center’s lender groups.”
CFO of Guitar Center, Tim Martin, said of the news: “We are pleased with the outcome of these transactions and the support and cooperation that we received from our lenders who recognize the value of our businesses. These transactions bolster our immediate liquidity position and allow us to focus on operating our business through these difficult times. We believe that with these transactions and the staged reopening of the country along with our pre-pandemic positive business performance, we are well positioned to meet these challenging market conditions.”
Guitar Center has been hit hard by the coronavirus pandemic, leading it to furlough a large number of staff last month. In a letter about this furloughing, Guitar Center’s CEO Ron Japinga wrote that “Further difficult decisions will need to be made in the months ahead to maintain the viability of our businesses as well as support our dedicated associates during this challenging period.”
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