Remington is one of the most famous names in firearms, but that doesn’t mean their finances are doing well. In fact, their last financial statement revealed that they were in a large amount of debt and were struggling to find new creditors.
Now, it looks like Remington might enter into bankruptcy.
Remington owes a massive debt worth nearly $1 billion dollars and would file for Chapter 11 bankruptcy. This would allow them to continue their operations and bring in revenue while dealing with creditors and the court.
To help manage payments between lender and debtor, there is something called an “administrative agent”. Remington named the newly formed Ankura Trust Company as their administrative agent. Ankura specializes in working in “distressed and default situations”.
Remington’s bankruptcy plans were supposed to happen sooner, but they got delayed because of a problem with Bank of America.
BoA was supposed to be Remington’s original administrative agent, but they pulled out after the Parkland school shooting which put pressure on BoA to stop dealing with gun companies.
Currently, Remington is owned by Cerberus Capital, a private investment firm. Cerberus Capital owns several other companies, but Remington is their biggest.
They originally planned to grow Remington and then take the company public, but that plan started going downhill after mass shootings started getting more attention, such as the Sandy Hook shooting.
Now, Cerberus Capital’s plan is to give Remington to its lenders after the bankruptcy. Some of the lenders who would gain ownership include Franklin Resources and JP Morgan.
Remington isn’t the only gun company that’s been hurting lately. Several other gun companies have seen decreased sales since President Trump took office.
This is likely because Trump vowed to be gun-friendly, and made voters breathe a sigh of relief when he won out against Hillary Clinton, a rabid anti-gun advocate.
The string of mass shootings has also hurt gun companies such as Remington, as there has been growing anti-gun sentiment across the country. Even some previously proud gun owners have chosen to give up their firearms, which has no doubt hurt sales to some degree.
Despite all the bad news for Remington, there’s still hope on the horizon for them. After their restructuring, they’ll be on their way to being profitable again thanks to a strategic decision made in 2014 where they relocated their factories to Huntsville, Alabama with the intent to cut costs and increase overall profits.