Last week we reported that Remington was seeking financing to file for Chapter 11 bankruptcy. On Monday the iconic gunmaker announced a financing deal had been agreed with its creditors. A Restructuring Support Agreement has been announced that will reduce approximately $700 million worth of Remington Outdoor Company’s consolidated outstanding debt.
A Remington will also receive a cash injection of $145 million of new capital to keep the business operating and allow for a restructuring program to begin. A press release issued by the company on Monday, 12th February, reassured that:
“Remington’s business operations will continue to operate in the normal course and will not be disrupted by the restructuring process. Payments to trade partners, employee wages and other benefits, support for customers, and an ongoing high level of service to consumers will continue without interruption.”
The bankruptcy comes as the company posts historic losses, with sales dropping 27% in the first nine months of 2017, to $466.7 million, resulting in a $28M operating loss. As part of the restructuring agreement Remington’s creditors will get company equity in exchange for the company’s $950 million debt being written down.
The Executive Chairman of Remington, Jim Geisler, commented in the release that:
“Since its founding over 200 years ago, Remington has been a uniquely American company and brand. Our longevity is owed to generations of loyal customers and hard-working employees who met challenges and delivered results. Difficult industry conditions make today’s agreement prudent. I am confident this regrouping ensures that Remington will continue as both a strong company and an indelible part of our national heritage.”
The press release outlines some of the key elements of the restructuring agreement and notes that the agreement is subject to meeting “specified milestones relating to the filing, confirmation, and consummation of the restructuring.”
The companies CEO, Anthony Acitelli, sought to reassure consumers, creditors and investors saying:
“Importantly, the fundamentals of our core business remain strong. We have an outstanding collection of brands and products, the unqualified support of a vibrant community across the industry, and a deep and powerful culture. We will emerge from this process with a deleveraged balance sheet and ample liquidity, positioning Remington to compete more aggressively and to seize future growth opportunities. We look forward to serving our customers, our partners throughout the industry, and our many fine employees, now and long into the future.”
Remington Chapter 11 Banruptcy Sources:
You can read Remington’s 2017 quarterly financial report here
The full press release is available to read on Cision PR Newswire here