U.S. weapons manufacturer Remington Outdoor Co Inc said on Thursday it had emerged from Chapter 11 bankruptcy with less debt and more stable financing that may help it ride out a slowing market for firearms.
Remington, America’s oldest gunmaker, filed for bankruptcy protection in March, weeks after a shooting at a high school in Parkland, Florida killed 17 people and triggered intensified campaigns for gun control by activists.
Under the reorganization plan, inked two days before the Feb. 14 Parkland shooting, creditors including JPMorgan Chase & Co (JPM.N) and Franklin Advisors will take ownership stakes in the company in exchange for forgiving more than $775 million of debt.
Remington also received a $193 million new lending package funded by seven banks, including Bank of America Corp.
“It is morning in Remington country,” Chief Executive Anthony Acitelli said in a statement.
Investors in Cerberus Capital Management LP, the previous owner, had urged the private equity fund to sell Remington after its Bushmaster rifle was used in a school shooting in 2012 in Sandy Hook, Connecticut, in which 20 children died.
Remington has said its bankruptcy would not affect lawsuits against it, including one filed by the families of Sandy Hook victims. It is also appointing a new board of directors.
Remington’s bankruptcy was partly triggered by a decline in gun sales as President Donald Trump’s election eased firearm enthusiasts’ worries about increased regulation.
Following the Parkland shooting, companies such as Delta Air Lines Inc, Dick’s Sporting Goods Inc and Walmart Inc cut ties with gun-rights groups or restricted sales of weapons.
Bank of America has hinted that it may sell its participation in Remington’s exit financing package.
“These companies have a real opportunity to solidify a brand that is in sync with what customers want now and in the future,” said gun control advocate Igor Volsky. He called Parkland “a tipping point for Americans waking up and saying that guns are a real problem.”
Distressed investors who normally view bankruptcies as an opportunity to obtain equity in a restructured company on the cheap largely stayed away from Remington.
“Because it filed for Chapter 11 just weeks after the tragic Parkland shooting, Remington became the hot potato that many investors did not want to touch,” restructuring attorney Vincent Indelicato of Proskauer Rose said in an email.