Colt Defense announced on Wednesday that it has completed its financial restructuring process and emerged from Chapter 11 bankruptcy.
The iconic gun maker first filed for bankruptcy last June after it was not longer able to pay its creditors, at the time listing approximately $384 million in debt. In a press release on Wednesday, Colt confirmed that it had reduced that debt by $200 million after an additional $50 million was raised through the restructuring process. Colt also nailed down a long-term lease for its West Hartford facility, where it employs over 600 workers, and has entered into a Memorandum of Understanding with the United Auto Workers that settled issues related to retiree medical benefits.
“It is with profound appreciation to all of our key stakeholders that we share that we have completed the restructuring process and are emerging from Chapter 11 with a solid capital structure, significantly less debt, and much greater financial flexibility,” said Dennis Veilleux, President and Chief Executive Officer of Colt Defense LLC.
Colt originally planned to exit bankruptcy before the end of 2015, but the exit was reportedly delayed by the private equity firm that owns the company, Sciens Capital Management. The Wall Street Journal reported that Sciens missed a December deadline to fund $15 million of the recapitalization fund, only putting in $5 million. Bondholders decided to give Sciens until February to come up with the remaining $10 million.
“Importantly, we were able to restructure our balance sheet while meeting all obligations to our customers, vendors, and suppliers throughout this process,” Veilleux added. “This is a true testament to the hard work and support of our dedicated employees, as well as an affirmation of a shared confidence among our key stakeholders and creditors that Colt is on the right path. We are grateful for their commitment to Colt and we look forward to the future as we build on our heritage as an iconic American brand with renewed vigor and purpose.”
According to CNN, analysts say that Colt has been hit hard by dwindling military contracts, especially for the M4 carbine and the M203 grenade launcher. The last time that Colt exited bankruptcy was in 1994.