Guitar Center, Inc. announced on November 13, 2020 that it has entered into a comprehensive Restructuring Support Agreement (the RSA) with its key stakeholders, including its equity sponsor, a fund managed by the Private Equity Group of Ares Management Corporation, new equity investors Brigade Capital Management and a fund managed by The Carlyle Group, as well as supermajorities of its noteholder groups.

“Regarding Reorganization Proceedings To implement the financial restructuring plan (the Plan) contemplated by the RSA,” Guitar Center expects to file voluntary petitions for reorganization pursuant to Chapter 11 in the United States Bankruptcy Court. Currently, supermajorities of the Company’s noteholder groups have signed up to the RSA and committed to vote in favour of the Plan, above the required support thresholds in the respective agreements to approve the Plan. Guitar Center expects the process to be completed before the end of 2020. The contemplated transaction will be supported by up to $165 million in new equity investments from a fund managed by the Private Equity Group of Ares Management Corporation, a fund managed by the Carlyle Group and Brigade Capital Management. Guitar Center has negotiated to have a total of $375 million in Debtor-In-Possession (DIP) financing provided by certain of its existing noteholders and ABL lenders. In connection with the RSA, the Company currently intends to raise $335 million in new senior secured notes. UBS Investment Bank will serve as the lead placement agent in connection with this effort.

Milbank LLP is serving as legal counsel to the Company and BRG is serving as restructuring adviser. Houlihan Lokey is serving as the Company’s financial adviser.

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