UPDATE 11/19: Colt Defense LLC has avoided defaulting on its loan payments after securing a $70 million loan. Read more here.

Colt Defense LLC indicated last week in a filing with the US Securities and Exchange Commission that the company may default on a $10.9 million loan payment due this week. According to the Wall Street Journal, the gun maker was scheduled to make the payment to bondholders on Monday, but has a grace period until December 15 to pay out. If the company does not, it will be in default.

“The Company does not have sufficient funds to repay all of its debt upon an actual acceleration of maturity,” the filing, which was obtained by the Hartford Courant, states. “Lenders would likely take actions to secure their position as creditors and to mitigate their potential risks. These conditions would adversely impact the Company’s liquidity, and raise substantial doubt about the Company’s ability to continue as a going concern.”

It is bad news for Colt, especially after the company reunited with its civilian market branch, Colt’s Manufacturing Company, just earlier this year. The gun maker estimated that its operating income for the past quarter was down as much as 60 percent thanks to weak demand for commercial products and delays in sales to the US government. Bonds, as of last week, were trading as low as 30 cents on the dollar and it is expected that even if the company was able to pay bondholders in time, it will be likely for Colt to violate a $48.1 million term-loan agreement before the end of the year.

If Colt does default, there is a chance that creditors will demand immediate payment, causing the company to liquidate its assets and file for bankruptcy.

Image from ~Steve Z~ on the Wikimedia Commons

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9 thoughts on “Colt Sees Financial Troubles, Warns of Possible Default

  1. What a shame. A legendary firearms manufacturer going belly up. Shocking as well, being that we have a socialist Prez. You would have thought they would be extremely busy. Possibly too much competition with other manufacturers. Who knows, certainly a shame though.

  2. Colt was too dependent on Government Contracts and have now been thoroughly, roundly and soundly screwed by Obama and the dimocraps.

    1. The ultra conservatives in Congress who demanded the government cut spending at all costs are to blame. I know for sure because I’m one of those cuts. My job, along with many others, was deleted so that active military could attempt to do it at a cheaper cost. They have other responsibilities like training to save our butts. Before I left I had to cut almost all expenditures and contracts, that is probably what happened with Colt’s government contracts.

  3. colt is just like Honda

    If Honda made the honda 90 and or honda 110 again they would sell millions of them

    If Colt made the Python and Anaconda and kept the quality the same as original they would make millions overnight

    It’s like there trying to fail

    Colt should remake all of there original revolvers to the highest quality and the company would be so rich that they wouldn’t know what to do with there money

    Mabee they want to fail

    That’s too bad

  4. Colt is one of the gun manufacturers that refused to leave the high taxed and elaborate union benefits of the northeast US . They were asked by several southern states to relocate , but refused to do so. It is a sham that such a gun maker will go belly up because of stupid decisions by management . I personally own 2 of their fine guns (1911 45 acp and a AR-15 ) and I hate to see them only become part of history .

  5. Everyone who has ever picked up a gun owes allegiance to Colt. Of course, S&W was also a major player in the 19th century. But, Colt is an icon, as important as U.S. steel. Colt most likely doomed themselves when they grabbed the reigns on the M-16/AR-15. Hard to please the public all the time, when your devoted to the armed forces weapons, and vice versa. More than just the name, it may be a sign of things coming. Who’s next, Ruger? Springfield Armory? Maybe the govt. has found their way to eliminate guns…..

  6. Perhaps Colt could reduce their retail prices and start taking care of the real American hunters, shooters and collectors. Offer us a quality firearm at a fair price and you’ll have no problems selling your wares. Too many deals and too much attention is being paid to this lawless government. They used you Colt and now they’re throwing you aside, along with the American people and the Constitution. Nothing new….

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