The Remington Outdoor Co., one of the top gun manufacturers in the United States, reached a deal with creditors Monday to file for bankruptcy protection.
The maker of the Bushmaster AR-15-style rifle used in the CT shooting that left 20 first-graders and six educators dead in 2012 said Monday that the agreement with lenders will reduce its debt by about $700 million and add about $145 million in new capital.
Remington made the announcement in a news release, which states a prepackaged reorganization will be filed with the U.S. Bankruptcy Court in DE, which is headed by Stephen Feinberg's Cerberus Management.
Remington expects business operations to continue as normal during the restructuring. CBS News reports the new ownership will be structured so that "holders of Remington's $550 million term loan will get an 82.5 percent equity stake in the gunmaker, and third-lien note holders will get 17.5 percent of Remington and four-year warrants for a 15 percent stake". In the first three quarters of 2017, Remington's sales fell 27.5% to $466.7 million, pushing it into the red.
Huntsville-Madison County Chamber of Commerce CEO Chip Cherry also told that newspaper that new Remington CEO Anthony Acitelli is going to relocate to the Alabama facility.
The gun industry, which also includes publicly traded companies like American Outdoor Brands, owner of the Smith & Wesson brand, as well as Sturm Ruger & Co. and Vista Outdoor, has experienced slumping sales since the election of President Donald Trump.More news: UNC academic fraud case referenced by Notre Dame president criticizing NCAA
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"We have an outstanding collection of brands and products, the unqualified support of a vibrant community across the industry, and a deep and powerful culture".
The local office now serves as a call center to assist customers as they diagnose or fix issues with their Remington firearms. That included the checks declining in 10 of 12 months, and by an 8.4 percent decline overall to 25.2 million. The shooter who killed 20 first-graders and six adults used a Remington-made rifle.
However, Remington, which is controlled by buyout firm Cerberus Capital Management LP, was abandoned by some of Cerberus' private equity fund investors at that time.
Trump's candidacy was supported by the National Rifle Association, and his two eldest sons are hunting enthusiasts.
The company said the new capital will markedly strengthen the company's consolidated liquidity, balance sheet and long-term competitiveness.