Remington Outdoor Company, formerly known as Freedom Group, is filing for bankruptcy.
In a statement released today, the gun maker said it had reached a Restructuring Support Agreement (RSA) with creditors for financing that would allow it to continue operations while it files for chapter 11 bankruptcy.
The agreement reduces Remington’s outstanding debt by approximately $700 million. Debt currently sits at around $950 million. The agreement also allows for the flow of $145 million in new capital into the company’s subsidiaries. Those subsidiaries include Remington, Bushmaster, DPMS Panther Arms, Marlin, Barnes, Advanced Armament Corp. and many others.
Remington’s business operations will continue as normal during the restructuring process. Payments to trade partners, employee wages, customer support and service will continue uninterrupted, the press release says.
Notes From Remington Outdoor Company
“Since its founding over 200 years ago, Remington has been a uniquely American company and brand,” Executive Chairman of Remington Jim Geisler said. “Our longevity is owed to generations of loyal customers and hard-working employees who met challenges and delivered results. Difficult industry conditions make today’s agreement prudent. I am confident this regrouping ensures that Remington will continue as both a strong company and an indelible part of our national heritage.”
“Importantly, the fundamentals of our core business remain strong,” Remington CEO Anthony Acitelli added. “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. [Remington] 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.”
News about the bankruptcy filing started to leak last week, when a new report from Reuters revealed the gun maker had reached out to banks and credit investment funds to obtain the financing that would enable it to initiate bankruptcy proceedings. The news came just days after the company reached a forbearance agreement with creditors upon missing a debt payment.
Various credit rating agencies, Reuters said, deemed Remington’s capital structure “unsustainable.”
Reports referenced “weak operating performance” and the uncertainty associated with the demand for guns and ammunition. They blame the company’s sales decline on “receding fears” that guns would come under further regulation with the election of Donald Trump to the presidency.
Remington’s sales declined 27 percent in the first nine months of 2017. The decline translates to an operating loss of $28 million.