Remington seeks financing to file for bankruptcy
Remington Outdoor Company Inc, one of the largest U.S. makers of firearms, has reached out to banks and credit investment funds in search of financing that will allow it to file for bankruptcy, people familiar with the matter said on Thursday.
FEBRUARY 9, 2018 - Reuters
> The move comes as Remington reached a forbearance agreement with its creditors this week following a missed coupon payment on its debt, the sources said. The company has been working with investment bank Lazard Ltd (LAZ.N) on options to restructure its $950 million debt pile, Reuters reported last month.
> Some potential financing sources, including credit funds and banks, have balked at coming to Remington’s aid because of the reputation risk associated with such a move, according to the sources. Remington, which is controlled by buyout firm Cerberus Capital Management LP, was abandoned by some of Cerberus’ private equity fund investors after one of its Bushmaster rifles was used in the Sandy Hook elementary school shooting in Connecticut in 2012 that killed 20 children and six adults.
…
> The Madison, North Carolina-based gun manufacturer faces a maturity of an approximately $550 million term loan in 2019. Remington also has $250 million of bonds that come due in 2020 and are trading at a significant discount to their face value at around 16 cents on the dollar, according to Thomson Reuters data, indicating investor concerns about repayment.
> Remington’s sales plunged 27 percent in the first nine months of 2017, resulting in a $28 million operating loss.
…
> sources asked not to be identified because the deliberations are confidential. Remington did not respond to several requests for comment. Cerberus declined to comment.
Source: https://www.reuters.com/article/us-remingtonoutdoor-bankruptcy-exclusive/exclusive-u-s-gunmaker-remington-seeks-financing-to-file-for-bankruptcy-sources-idUSKBN1FT04C?feedType=RSS&feedName=businessNews
http://archive.today/sWsmq
Is this it? If Remington goes under will it be another step towards destroying the supply of firearms? Or will this be an opportunity for creative destruction where some of Remington's designs and brands can be snapped up by people who have some clue what to do with them? Will Remington green box ammo go away?