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Discussion in 'The Backstage' started by paruwi, Oct 20, 2017.
We're just on page 3....
Seconded. Seems like an absurdity to own a factory in a major downtown core. If the market is strong, it's a good time.
I love that song. Double dropped D I think.
The Fedex Forum went up across the street, a few years after Gibby moved in. I am sure that the property has appreciated significantly since they bought it in the late '90s.
Might be the smartest move Henry ever made.
One-time windfalls (and expenses) that aren't related to the day-to-day business of the company are reported as "Other Income/expense" separately (not mixed in with actual operational revenues) and at the bottom of the income statement. Anyone looking to buy the company would immediately back this number out to get a better idea of the financial performance of ongoing operations.
Where this would help is in increasing cash on the balance sheet (which would probably be used to pay down the balance on their revolver) when dealing with their ABL ("asset based lender"). They may have agreed to do this (sell excess real estate holdings) back in the first quarter when they were finalizing the debt package.
Debt is cheap right now. They raised $185 million, back in March 2017. They retired existing credit lines at that time, though I don't know how much of the financing went out the door on Day-1. I'd guess that they got an extra $40-50 million. They are trying to sell off around $30 million in real estate.
They need $375 million to pay off the maturing bonds, next year. Every dime of extra capital raised back in March and all proceeds from real estate sales will help lower that number.
They'll need to sell debt and/or equity, early next year. It is too late in the year to start the process. If you don't have firm commitments by Thanksgiving, there is no way the deal will close before New Years Eve. So, unless they are almost about to close, they will hit the ground running in January.
I'm not sure that the debt market would bite on all $300 in the form of debt. However, they could service $300 million of debt at 8% and continue to service their ABL and other loans. The equity value of the company is probably worth about $400-600 million. They could sell 25% for $100-$150 million which, would make the debt raise much easier.
In any event, the senior lenders (who just gave them $185 million in March) are not dummies. There is no conceivable way they issued those loans without absolute confidence in Gibson's ability to retire the maturing bonds.
I'll miss it. Beale Street has been on the decline for several years and I would like to see Gibson stay. I understand it though.
Yeah it's Memphis, TN location not Nashville, TN. If it was Nashville then I would agree with sentiments that Gibson is in big trouble.
And I don't think Henry is going to move back to Kalamazoo, Michigan. Tennessee is a Right to Work state where Michigan you have deal with union's. That's why Gibson Move Tennessee in first place.
Vic got 'em all set up in the shed with an extension cord. They'll be fine. Back to work, fellas.
they got a surge strip,...seems legit. It'll be fine.
Ok who ordered the Smoke-Burst Studio?
That one's ready to go.
Other orders will have to wait.
I just heard the news!
Just looking to downsize Memphis some people. They don't use half of that extremely valuable land/facility so why keep it when the guitar market is down and the property market is up. If they can get even close to the selling price that is great for Gibson. I'm sure they didn't pay anything anywhere close to that amount when they bought the property.
Gibson USA, Custom and Nashville will be perfectly fine.
That's what they get for building all those flame-tops.
They need a spot on Madison Ave in midtown, maybe around Minglewood. Or over on Marshall near the old St Blues shop. Hell, even South Main St.
The building looks dead everyone I pass it. Its a shame, birthplace of rock 'n roll and all.
Yep..plug that Gibson into Marshall and make some music..
Michigan is also a right to work state. Has been for a few years now.
Translation...We are looking for something smaller because with the exception of a few of our most expensive guitars which most of you can't afford anyway we're going to be building most of our stuff in Chiner in the near future. We'll be setting a wood shop up in our CEO Henry's garage and just move the cars out every morning. As usual Earl Scheib will continue to do the paint work in a canvas tent at the rear of the property.
When I played Memphis a couple yrs back, didn't even go to the Gibson plant...
Didn't feel guilty... Did go to Huey's and Corky's though... Priorities...
Actually there have been some awesome deals new this year on 2015-2016 models. More than usual in the last 10 or so years.