Remington Pursues Bankruptcy to Reduce Massive Debt
Remington Outdoor Company Inc. (Remington) will file for Bankruptcy in the Delaware Federal Court. The North Carolina-based company is pursuing Chapter 11 Bankruptcy to reduce its $950,000,000 in debt. According to Reuters, Remington hopes to work out an agreement with its creditors to write off about $700 million in debt obligations. That would permit Remington to sustain manufacturing operations and retain most of its work-force. In announcing the Bankruptcy filing, Remington executives stated that the company will continue to operate as usual during the bankruptcy proceedings.
(Reuters) – Remington Outdoor Company Inc., one of the largest U.S. makers of firearms, said on Monday it had reached a deal with its creditors to file for Chapter 11 bankruptcy to slash its $950 million debtload. Remington said it will receive $145 million in bankruptcy financing to fund the company through the Chapter 11 process.
Cerberus Will Yield Control of Remington to Creditors
If the pending deal with creditors goes through as planned, Cerberus, the private equity group that currently controls Remington, will lose ownership of the company. Through the bankruptcy, according to Reuters: “the company’s creditors, which include Franklin Templeton Investments and J.P. Morgan Asset Management, will exchange their debt holdings for equity in the company.”
Two months ago, AccurateShooter.com noted that Remington was considering Bankruptcy. Our report noted that an earnings decline left Remington few options. In early December, Fox News reported: ““The rifle and shotgun manufacturer’s third-quarter sales plunged 41% as demand for firearms dried up. That led Remington to report adjusted earnings before interest, taxes, depreciation, and amortization that were 78% lower year over year. Over the first nine months of 2017, the company has produced a $60.5 million net loss, compared to a $19.1 million gain in the prior-year period. And with its credit rating in the trash bin, the future is bleak for ‘America’s oldest gunmaker’. Today, debt on the company’s books has ballooned to almost $1 billion[.]”
Remington Has a Storied History
Founded in 1816 by Eliphalet Remington in New York, Remington is the oldest continuously-operating gun manufacturer in the United States. Even with its present difficulties, Remington still sells more sporting rifles and shotguns than any other American company. Remington has developed more cartridges than any other U.S. company. And it is the only American company that sells firearms AND ammunition under its own name.
