US Gunmaker, Remington, will file for Chapter 11 bankruptcy.
Remington Outdoor Company Inc, one of the oldest and most recognized gun companies in the world, announced on Monday that it will file for Chapter 11 bankruptcy. The move will slash its $950 million debt load and would allow the company to stay in business while it restructures. According to Remington, the agreement with lenders will allow the company to reduce its debt by $700 million and injects $145 million of new capital into its subsidiaries.
Remington has faced backlash by gun control lobbyists as the company is known for being the maker of the Bushmaster AR-15-style rifle, which was used to kill 20 first-graders and six educators in Connecticut in 2012.
The bankruptcy is also due to a decline in sales, caused by growing fears that guns will become heavily regulated by the US government.
President Donald Trump assured the public that he would not infringe on “the right of the people to keep and bear arms”. Since Trump won the 2016 election in November, gun manufacturer, American Outdoor Brands Corp, lost nearly two-thirds of its stock market value. Sturm Ruger & Company Inc also saw its stock fall by approximately one quarter.
Remington said it will benefit from $145 million in the bankruptcy filing which will fund the company through the Chapter 11 process.
The bankruptcy will sever ties between the company and its private equity firm, Cerberus Capital Management LP. Remington’s creditors, which include JPMorgan Asset Management and Franklin Templeton Investments, will exchange the company’s debt holdings for equity in the company.
Remington said that it will continue its business operations in addition to keeping its workforce on the payroll.
“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,” said Anthony Acitelli, Remington Chief Executive Officer.
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