Guitar Center Inc, the largest US retailer of musical instruments and equipment, filed for Chapter 11 bankruptcy on Saturday, as music fans moved online shopping during the coronavirus pandemic.
The company said in a statement that the retailer has negotiated a total of $ 375 million in equity financing from existing lenders, and intends to raise $ 335 million in new secured bonds.
Earlier this month, the company reached a restructuring agreement with major stakeholders that includes debt reduction of about $ 800 million and new equity investments of up to $ 165 million to recapitalize the company.
The company said in a lawsuit that it had between $ 1 billion and $ 10 billion in assets and liabilities.
The Guitar Center, which has nearly 300 stores across the country, said business operations will continue without any interruption.
Milbank LLP worked as a legal advisor, BRG acted as a restructuring advisor, and Holihan Loki was the company’s financial advisor.
The Guitar Center started in 1959 as a Hollywood home organ store.
The company filed for Chapter 11 bankruptcy in the United States bankruptcy court in the Eastern District of Virginia.