Guitar Center Enters Restructuring Pact to Cut Debt by $800 Million

(Bloomberg) -- Guitar Center entered into a restructuring support agreement that includes up to $165 million in new equity investments and a reduction of debt by nearly $800 million, according to a statement.

• The musical instrument retailer inked the agreement with stakeholders such as including its equity sponsor, a fund managed by the Private Equity Group of Ares Management Corporation, new investors Brigade Capital Management and a fund managed by The Carlyle Group, as well as supermajorities of its noteholder groups.
• Agreement intends to allow Guitar Center and its brans to continue to operate in the normal course of business/
• Guitar Center expects to file voluntary petitions for reorganization following Chapter 11 in the U.S. bankruptcy court.
• Guitar Center has negotiated to have a total of $375 million in debtor-in-possession financing provided by certain of its existing noteholders and lenders.
• Earlier, Guitar Center Is Said to Prep Bankruptcy With Creditor Support
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