Remington Arms Looking to Restructure Nearly $1 Billion in Debt, Reports Say
The company that owns Remington Arms, one of America's largest gun manufacturers, has reached out to investment bank Lazard for options to restructure its $950 million debt load, according to a report by Reuters. Remington's "capital structure is currently unsustainable," insiders told Reuters on Friday.
The news comes at a time when Remington employees at their Ilion plant are completing yet another furlough; this one shut down production lines for one week, with work
resuming on Monday, January 29th. Employees were also furloughed 11 days in November and December and 177 workers were laid off in 2017. Remington's Ilion plant currently employs about 977 workers. Remington, which is owned by the Freedom Group and is based in Madison, North Carolina, just celebrated their bicentennial. Meanwhile, Remington Executives have been showing off their new detachable mag shotgun at the SHOT show in Las Vegas, the largest gun show in the world, which wraps up on Friday.
"We are very concerned that Remington will be unable to refinance debt that comes due in April 2019 given its weak operating performance and high financial leverage," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. "We understand Remington has a number of options available to address the 2019 maturities. Depending on the solution, we may categorize as the option as a default" noted Cassidy.
According to the Reuters report, Remington has a $550 million term loan due in 2019 and $250 million in bonds due in 2020. It also sites sagging gun sales and lawsuits like the one following the Sandy Hook shooting, that have placed Remington as well as other gun makers at financial risk. Remington competitor, Colt Manufacturing filed bankruptcy in 2016, according to the report.