Remington Outdoor Company reached a restructuring agreement with creditors that will reduce debt by $700 million and contribute $145 million in new capital.
Creditors will end up with a stake in the company A pre-packaged plan of reorganization is expected to be filed with the United StatesBankruptcy Court in Delaware.
Remington has been struggling with a decline in the sales of firearms, following the election of Donald Trump as president. The election eased fears regarding gun control efforts.
Executive Chairman of Remington,Jim Geisler, stated, “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 agreement can be terminated upon the occurrence of certain events. Chapter 11 filings are also subject to objections from other creditors.
Remington Outdoor Company, headquartered inMadison, N.C., is a maker of firearms, ammunition, and related products for the hunting, shooting sports, law enforcement, and military markets.
Brands include Remington, Bushmaster, DPMS/Panther Arms, Marlin, H&R and Dakota Arms.
Remington, a two-century-old gunmaker, has been under a succession of owners. The company was owned by DuPont for nearly six decades before being sold to a private equity company in the 1990s.
DuPont’s research led to Remington’s Nylon 66, a Remington rifle that used a DuPont material, rather than a wood stock.
Current owner is Cerberus Capital Management, a private equity firm that owned Chrysler for a short time before the company went into bankruptcy proceedings and became part of the federal bailout of the industry. The company later became part of Italian automaker Fiat.
Private equity firms often use debt, rather than stock, to finance expansion or the make the acquisition itself.
Oftimes, the goal is to later form a publicly traded company, sell stock and cash out. In other cases, the debt burden and sliding revenues prevent a stock sale and lead to a pre-packaged Chapter 11.
For more information on Remington, log on to www.remingtonoutdoorcompany.com.