Posted on 06/13/2015 10:37:21 AM PDT by Jan_Sobieski
Colt, the iconic American gunmaker, could be bankrupt within days. The company, that has been making guns for 160 years, has been struggling financially and missed a $10.9 million interest payment on its debt in mid-May.
Colt admitted, in a regulatory filing, that its failure to make that interest payment raises "substantial doubt about the company's ability to continue as a going concern." Colt also said it "may seek relief under the bankruptcy code." The company has a 30-day grace period until June 14 to make the interest payment after which it has to find a way to restructure the debt with its bondholders.
Kevin Starke, gun industry analyst for CRT, said that Colt had already signed a debt restructuring agreement with its bank, but a group of bondholders rejected it that would have dropped the bonds to 45% of their face value. Starke said that bondholders are reluctant to agree to any pact that forces them to take a loss. That's because they might have a better chance of recovering all or most of their money in bankruptcy, assuming that Colt gets sold for enough money to cover the $250 million worth of bonds and another $102 million in additional debt.
That could be possible if a buyer emerges from among its larger gunmaking rivals such as Smith & Wesson (SWHC) or Sturm Ruger (RGR). Colt's status in the gun industry and its role in American history cannot be overstated. The West Hartford manufacturer established by Sam Colt has been the most famous gunmaker in America since the 1840s, when the Texas Rangers adopted its revolver during their Wild West wars with Native Americans...
(Excerpt) Read more at money.cnn.com ...
Well, the obvious thing is for fedgub to step in an order an AR-15 for every adult citizen.
Kenyes would be proud.
I wonder how much of their financial woes is due to labor costs?
Bttt
My thoughts also.
I don’t think it has helped Colt to have its headquarters in Hartford, CT. Connecticut was one of the biggest manufacturing states in earlier times, but those times have gone. The state is weighed down with taxes and gun haters.
I’ve got the same gun,it was made in 1916.A family friend carried it in the Argonne Forest in 1918.
Mismanagement of money.
What’s this the fifth go round with this outfit?
If a gun company can’t make it in this environment, they need to hang it up.
That’s a real piece of history. Cherish it.
Wow. Mine’s circa early 2,000’s.
When I went to Hartford, Colt still had very fine workers and outstanding craftsmen, particularly in the Colt Custom Gunshop but the factory floor was dirty and filled with both 19th Century overhead belt-driven polishers and computer-controlled machinery stations. While the Colt workers wanted to keep making the beautifully-hand finished Colts we all know and admire, the Front Office wanted castings and plastic and roll pins.
Never could convince them that we want quality and most of us are willing to pay the difference. Their loss.
Incompetent management. Anyone who would keep a firearms manufacturer in Connecticut shouldn’t be able to take refuge in the ‘business judgment rule’.
So where did the profits go from the past 7 years? No liquid was saved for slowdown in sales?
Poor planning and management. How did they not plan for a slowdown in sales after everybody stocked up.
We have two Colts. One Combat Commander and one Python. Our most recent acquisitions is a brace of Kimber 1911s. Superb quality guns those. Accurate right out of the box, too. After the recommended break in they’re eating everything we feed them.
Sorry, Colt but the cost delta between you and Kimber just wasn’t enough to swing things your way.
L
See post 16.
Best,
L
Nuthing wrong with Kimbers
Ammend that to “any new Colt product” and I will support it!
I’m certain they will get a bail out just like GM.
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