US retailer Guitar Center enters restructuring deal to cut debt by US$800m
[TAMPA] Guitar Center Inc, the largest US retailer of music instruments and equipment, has reached a restructuring agreement with key stakeholders that includes debt reduction by nearly US$800 million, the company said in a statement.
The retailer signed the restructuring support agreement (RSA) with its equity sponsor, a fund managed by private equity firm Ares Management, new investors Brigade Capital Management and a fund managed by Carlyle Group, as well as supermajorities of its noteholder groups.
The agreement includes new equity investement of up to US$165 million to recapitalise the company, the retailer said.
The company expects to file voluntary petitions for reorganisation following Chapter 11 in the US bankruptcy court to execute the prepackaged financial restructuring plan, according to the statement.
Guitar Center, which owns nearly 300 stores across the country, said business operations will continue without any interruption under the deal.
In 2017, the company said it was exploring ways to restructure its US$1.3 billion debt burden as music lovers moved their shopping online.
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Guitar Center began in 1959 as a store selling home organs in Hollywood.
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