Guitar Center Inc., The largest U.S. retailer of musical instruments and equipment, has reached a restructuring agreement with key shareholders, including a debt reduction of nearly $ 800 million, the company said in a statement.
The retailer has signed a restructuring support agreement (RSA) with its equity sponsor, private equity firm Ares Management LP, a fund managed by new investors Brigade Capital Management and the Carlyle Group and the super majority of its noteholder groups.
The deal includes up to $ 165 million in new equity investments to recapitalize the company, the retailer said.
The company expects to file voluntary petitions for the following restructuring Chapter 11 According to the report, the US Bankruptcy Court to implement the pre-compiled financial restructuring plan.
The Guitar Center, which has nearly 300 stores across the country, said business activities would continue without any disruption under the deal.
In 2017, as music enthusiasts moved their shopping online, the company said it was exploring ways to restructure its $ 1.3 billion debt burden.
The Guitar Center opened in 1959 as a home appliance store in Hollywood.
(Reporting by Aishwarya Nair in Bangalore; Editing by Kim Gokul)
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