With nearly $1 billion in debt and credit agencies warning that their capital structure is “unsustainable”, firearms and ammunition manufacturing giant Remington is looking for financing to fund business operations during bankruptcy proceedings. An exclusive report from the news agency Reuters also states that Remington’s sales dropped 27% in the first nine months of 2017 resulting in a $28M operating loss.
A link to the full story can be found below.
(Reuters) – 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.
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.
Remington is seeking debtor-in-possession financing that will allow it to fund is operations once it files for bankruptcy, the sources said. The size of the financing and timing of Remington’s bankruptcy plans could not be learned.
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 sources asked not to be identified because the deliberations are confidential. Remington did not respond to several requests for comment. Cerberus declined to comment.
Credit rating agencies have warned that Remington’s capital structure is unsustainable given its weak operating performance and significant volatility in the demand for firearms and ammunition.
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