Remington lovers around the world will hate reading this news. The famous gun manufacturer Remington Outdoor Company is seeking financial help from banks and credit investment funds in order to help them file for bankruptcy.
According to various sources that are close to Remington’s financial situation, the company began searching for financial help upon missing a coupon payment on its debt. Since then, the gun manufacturer has been getting assistance from an investment bank to help it restructure over $950 million in debt.
Remington is seeking debtor-in-possession financing, which will help ensure that they can still operate while the financial reorganization is occurring once bankruptcy is official.
Part of the reason for the company’s massive debt and financial instability is the current state of the economy. For instance, gun sales have been dropping significantly ever since the election. After all, the National Rifle Association was a key ally of Trump’s, and so he was a stark contrast from Democrat Hillary Clinton.
When gun lovers thought Clinton was going to win, firearm manufacturers began increasing their supply. However, upon Trump’s victory, Remington (and many other manufacturers) have been drastically losing sales. In just nine months, Remington lost 38% in sales and $177 million due to the decrease in demand.
According to Guns.com:
But another part of Remington’s troubles come from the investment side, according to Reuters. Following the 2012 shooting at Sandy Hook Elementary School, the company was abandoned by some of its investors after learning a Bushmaster rifles was used in the massacre. Bushmaster is one of the more than a dozen companies under the Remington umbrella. The company has had trouble regaining investors.
Remington has some $958 million in debt and repayments are due next year and 2020. Given the weak market and looming debt payments, notable credit rating services have downgraded the company’s performance and warned of the company possibly defaulting on loans.