Gunmaker Colt Defense is filing for bankruptcy
Bryan Logan
Colt Defense, the gun manufacturer that has been in business since the 1800s, is filing for Chapter 11 bankruptcy.
In a press statement issued Sunday night, representatives for Colt Defense say the company is initiating a Section 363 sale with Sciens Capital Management as the "stalking horse bidder," meaning Sciens has been chosen to make the first bid for the gun maker.
Colt representatives tell Business Insider the company has received $20 million in financing to help it continue operations during the process, which could last 60 to 90 days.
Under a proposed agreement, Sciens Capital Management would acquire Colt's assets "to ensure a smooth and swift transition of the business with all of its iconic brands, products, and operations" bolstered by a lower debt burden.
The West Hartford, Connecticut-based company emphasized its commitment to the community in which it has operated for generations, citing "a long term extension" on a lease for its facilities there.
The company's chief restructuring officer, Keith Maib, punctuated the statement, saying "Colt remains open for business."
Colt Defense has enjoyed success for much of the past century, thanks in part to lucrative contracts with the US military, in which Colt was the primary manufacturer of the weapons used by frontline troops.
The contract ended in 2013 and, combined with some supply troubles and a slowdown in sales, business began to flounder. Colt missed a $10.9 million bond payment last month, much to the chagrin of holders carrying $250 million in the company's senior bonds.
CRT Capital analyst Kevin Starke told Reuters last week that a sale "might be best for the stumbling company and its bondholders."
"Sometimes the best way out is to sort of scrap the whole thing and start again," Starke said.
In a press statement issued Sunday night, representatives for Colt Defense say the company is initiating a Section 363 sale with Sciens Capital Management as the "stalking horse bidder," meaning Sciens has been chosen to make the first bid for the gun maker.
Colt representatives tell Business Insider the company has received $20 million in financing to help it continue operations during the process, which could last 60 to 90 days.
Under a proposed agreement, Sciens Capital Management would acquire Colt's assets "to ensure a smooth and swift transition of the business with all of its iconic brands, products, and operations" bolstered by a lower debt burden.
The West Hartford, Connecticut-based company emphasized its commitment to the community in which it has operated for generations, citing "a long term extension" on a lease for its facilities there.
The company's chief restructuring officer, Keith Maib, punctuated the statement, saying "Colt remains open for business."
Colt Defense has enjoyed success for much of the past century, thanks in part to lucrative contracts with the US military, in which Colt was the primary manufacturer of the weapons used by frontline troops.
The contract ended in 2013 and, combined with some supply troubles and a slowdown in sales, business began to flounder. Colt missed a $10.9 million bond payment last month, much to the chagrin of holders carrying $250 million in the company's senior bonds.
CRT Capital analyst Kevin Starke told Reuters last week that a sale "might be best for the stumbling company and its bondholders."
"Sometimes the best way out is to sort of scrap the whole thing and start again," Starke said.
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