According to local reports, plans to rescue Gibson may have stalled over a disagreement between the management and its financiers, over the value of individual directors’ stakes in the firm.
The talks between Juszkiewicz and Gibson President (and minority shareholder) David Berryman on one side and KKR Credit Advisors on the other took place last month and focused on a potential debt-for-equity swap that would have put KKR in control of the embattled guitar firm.
According to the Nashville Post, however, the talks foundered over the parties’ “significantly divergent” opinions on how much Juszkiewicz and Berryman should be paid for their stakes.
Gibson’s acknowledgement of the KKR talks — and the idea that the private equity giant could end up controlling the company — marked a change of position for Juszkiewicz, who had previously maintained that he would be able to find new funding to pay off holders of the $375 million of senior secured notes it took out in 2013 — more than $100 million in bank loans also will come due if those notes aren’t refinanced by late July — and said that disgruntled bond investors are out to take over the company, not be repaid.
Gibson also said Juszkiewicz and Berryman told KKR officials they think Gibson’s instruments and related audio equipment business will be worth between $642 and $696 million, based on its expected adjusted EBITDA of about $60 million.
