Remington Outdoor Co., 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 to restructure its $950 million debt pile, Reuters reported last month.
Some creditors have backed out of working with Remington because one of their rifles was used in the Sandy Hook shooting. Some may be backing out because credit rating agencies are warning that Remington’s capital structure is unsustainable. We reported last year that Remington was struggling because many people have stockpiled guns and ammo during the Obama presidency. Remington’s sales plunged 27 percent in the first nine months of 2017, resulting in a $28 million operating loss. Now that Donald Trump has been elected people feel their 2nd amendment rights will be protected based on the presidents own words. “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.
Remington’s sales plunged 27 percent in the first nine months of 2017, resulting in a $28 million operating loss.