Guitar Center, Inc. (“Guitar Center” or the “Company”), the world’s largest musical instrument retailer, announced that the United States Bankruptcy Court for the Eastern District of Virginia has confirmed the Company’s Plan of Reorganization (the “Plan”). As planned, the Company expects to emerge from Chapter 11 by December 31 with significantly reduced debt once customary conditions have been finalized.

“This approval represents a momentous and positive milestone in our long-term strategy,” Ron Japinga, CEO of Guitar Center, said. “Throughout this process, we have continued to serve our customers in-store and online, helping even more people make music during these unique times. I am grateful for our customers, associates, vendors and other partners for their unwavering support throughout this process. With our strengthened financial position, we will continue to reinvest and grow our business. We are nearing the end of a successful holiday season and I am excited about our bright future.”

Upon emergence, the Company is expecting to operate with a strengthened capital structure that will eliminate more than $800 million of existing debt. In connection with the Plan, the Company raised $350 million in new senior secured notes. In addition, several banks led by Wells Fargo and JPMorgan are expected to fund a new $375 million secured asset based financing facility, which would provide significant additional liquidity for the business. The new asset based financing facility, new senior secured notes and $165 million in new equity investments from a fund managed by Ares Management Corporation, funds managed by Brigade Capital Management and a fund managed by The Carlyle Group, are expected to provide the Company with the capital required to support ongoing operations, invest in its strategic growth initiatives and execute its business plan.

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