The rumors have been circulating for over a year, and last week, they got more serious when Reuters reported the company was searching for financing to file bankruptcy.
Remington will enter chapter 11 bankruptcy. The company plans to restructure to reduce its $950 million debt. Creditors have taken control of the company. It remains to be seen if they will sell it off or continue to run the company. Bankruptcy can take up to a year, so we might have a while before we see what happens.
In the interim, Remington’s Executive Chairman Jim Geisler says, “I’m confident this regrouping ensures that Remington will continue as both a strong company and an indelible part of our national heritage.” Reports say that Remington will continue operations as normal during the process.
Lawsuits, recalls and lack of sales saw Remington with a $27 million loss in the first nine months of 2017. Remington remains optimistic. Remington’s Chief Executive, Anthony Acitelli says, “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.”
Acquired by Cerberus Capital Management in 2007, but lost many investors in 2012, Remington will be handed over to its creditors that include Franklin Templeton Investments and JPMorgan Asset Management.
Remington will be financed $145 million to see them through the bankruptcy and the company plans to write off $700 million of their total debt.
Bloomberg News reports:
Remington’s prepackaged reorganization will be filed with the U.S. Bankruptcy Court in Delaware, according to a statement from the company. Holders of the gunmaker’s $550 million term loan will take an 82.5 percent equity stake in Remington while third-lien noteholders get 17.5 percent of the company and four-year warrants for a 15 percent stake, according to Remington. Creditors will also provide a $100 million debtor-in-possession loan to finance operations throughout bankruptcy.
Remington made the official announcement via press release, which you can read in its entirety here: