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U.S. gunmaker Remington seeks financing to file for bankruptcy

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  • Loki

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    https://www.reuters.com/article/us-remingtonoutdoor-bankruptcy-exclusive/exclusive-u-s-gunmaker-remington-seeks-financing-to-file-for-bankruptcy-sources-idUSKBN1FT04C

    U.S. gunmaker 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.

    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.

    Remington’s sales have declined in part because of receding fears that guns will become more heavily regulated by the U.S. government, according to credit ratings agencies. President Donald Trump has said he will “never, ever infringe on the right of the people to keep and bear arms.”

    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.

    The term loan maturing next year is also trading at a significant discount to full value, at around 50 cents on the dollar, the sources said.

    Remington’s sales plunged 27 percent in the first nine months of 2017, resulting in a $28 million operating loss.

    Reporting by Andrew Berlin in New York and Jessica DiNapoli in Las Vegas; Editing by Cynthia Osterman
     

    Ric-san

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    Didn’t Remington buy out Marlin few years back also...?
     

    Droshki

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    JFC. How do you end up $1 billion in debt? I have a hard time believing that all happened because of Sandy Hook 6 years ago.
     

    fv22

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    What a shame, hope they somehow pull through.
     

    fl57caveman

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    all the gun makers in the N.E area should move, they will taxed out of business by the gungrabbing dem lawmakers..
     

    Loki

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    Someone will buy the brand names, patents and tooling in a fire sale and start up again

    Hope so. I know they gave the Marlin brand a black eye, be nice to see them and the Remington name come back nice and strong.

    That said, some folks are going to lose their jobs and that blows.
     

    Snake-Eyes

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    Someone will buy the brand names, patents and tooling in a fire sale and start up again

    Hopefully... but they bought Marlin's name and tooling and proceeded to screw it all up. That's why people refer to a Marlin as either JM-stamped or a Remlin.

    Whomever buys them would be investing a lot of money. They'd have to ride out the first few years as people were shy about being the guinea pigs. Nothing worse than a company using the Gen-1 of a product and its buyers as field-testing product development.
     

    wildrider666

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    They got Para Ord too.

    Several very poor handguns, recalls, new production of outdated and not high demand handguns, 1911s and new line of MSRs into flooded markets, a long drugout trigger lawsuit, buying up several arms/related companies, building a new/larger/updated plant. Combine this with careless profit only focused management pushing volume without solid quality control. Add that to a "buyers market" where MSRP is a pipe dream unless you got something really new that spurs demand.

    Small companies failing, bought by larger companies/Groups only to drown in a sea of red. This bring a lot of uncertainties for the workers and their families.

    Colt has danced with death a few times. It is now trying to stay afloat onclose but updated versions of "Snake" revolvers.
     

    IronBeard

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    Well, they did it to themselves by placing mass production and profit before quality. I suspect it was the lack of quality that put 'em where they are. Once the word got out, it spread like wild fire. Sure glad I got my Remingtons and Marlins before things went bad.
     

    Droshki

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    It must take a special kind of incompetence to not be able to make a profit selling guns to Americans.
     

    IronBeard

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    Yep. I suspect they have so many returns, combined with the bad rep that comes with that, that they bleeding themselves dry. Even if they got it all right today, the bad rep will hang around for years.

    Sent from my SM-J320V using Tapatalk
     

    donr101395

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    It takes a special kind of stupid to run a gun manufacturer in the ground financially given the panic buying that was occurring pretty much the entire 8 years of Obummer's term.
     

    Telum Pisces

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    Their big 700 trigger recall may have had something to do with it too. Don't know. But I love my 700! It's my go to rifle! Too bad if they have ran things into the ground.
     

    SAWMAN

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    Did my 700SA trigger myself. Got it the way that I wanted it (quite easily) was not about to send it in and allow them to frig it up.
    Right at 3lbs,no creep and no overtravel. PERFECT !! ---- SAWMAN
     
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