At emergence, Guitar Center’s liquidity will be limited but is expected to grow through the forecast period.
EBITDA is expected to remain depressed in fiscal 2021 because of the Covid-19 pandemic, but management said it expects cash flow to be supported by working capital. The company said it expects to generate on average approximately $35 million in free cash flow per year from fiscal 2022 through fiscal 2024. Prepetiton secured noteholders received, in addition to cash, their pro rata share of new $160 million 15% dividend preferred equity.Īs a result of the plan, Guitar Center would reduce debt by $783 million resulting in a more than 5x reduction in leverage. At the value of the $165 million investment according to the plan, these three funds created the reorganized company at about 6.1x estimated fiscal 2021 EBITDA. After emergence, former equity owner Ares, prepetition unsecured noteholder Brigade, and Carlyle will each own about a third of the post-reorganized equity, pre-dilution for a management incentive plan and additional warrants reserved for Brigade. 17, setting up its exit from bankruptcy potentially by the end of next week, according to statements made by debtors’ counsel at the confirmation hearing. Guitar Center’s chapter 11 plan was confirmed yesterday, Dec.
