Remington Outdoor Co. is reportedly in talks with an international investment bank to restructure its debt in an effort to delay the need to file for bankruptcy protection, Reuters has reported in an exclusive development in Remington’s financial challenges.
Sources familiar with the talks said that Remington has consulted Lazard Ltd. about how it can restructure its $950 million debt.
Remington, founded in 1816, is America’s oldest continuously operating gun manufacturer. Its profitability has been hurt in recent years, partly because of lawsuits such as the Bushmaster litigation that followed the Sandy Hook school shooting. That case might well one day be ended under the Protection of Lawful Commerce in Arms Act (PLCAA), which is designed to prevent gun makers from frivolous lawsuits spurred by criminal misuse of a product, but meanwhile legal costs are piling up as the battle progresses through the judicial system.
Besides the litigation costs, Remington has experienced sales declines. That hurts the company’s credit rating, which in turn leads to higher interest on loans, continuing a vicious cycle that keeps businesses from being able to right the ship after major downturns.
Although several options for restructuring were discussed, no firm path was chosen, Reuters reported. Remington and its parent company, Cerberus Capital Management Group, did not comment in the article.