Hope is in the air?

Link to article:

By Tom Hals and Jessica DiNapoli

(Reuters) - U.S. gunmaker Remington Outdoor Co has obtained commitments for nearly $300 million from its existing lenders, including some of the biggest U.S. banks, after new sources of funding dried up in the months leading up to its filing for Chapter 11 bankruptcy.

During that time, the company's investment bank, Lazard Ltd <LAZ.N>, approached more than 30 possible lenders, according to court documents.

"The vast majority of lenders contacted, however, indicated they were reluctant to provide financing to firearms manufacturers," said Lazard banker Ari Lefkovits in the papers.

Most of the banks providing the bankruptcy funding were lenders to Remington before its current financial problems, according to court records. Without the funds, Remington may have been forced to go out of business and the banks could have seen their investment crash in value.

The company and its investors have been under heightened scrutiny after 17 were killed in a school shooting in Parkland, Florida in February.

Remington filed for bankruptcy one day after hundreds of thousands of Americans took to the streets to demand tighter gun control measures.

Banks often sell troubled loans to hedge funds when a borrower is heading into bankruptcy, but one source told Reuters that even as the Remington loans were heavily discounted, buyers were scarce.

The company's bankruptcy lenders include Bank of America Corp <BAC.N>, Wells Fargo & Co <WFC.N>, JPMorgan Chase & Co <JPM.N> and Deutsche Bank AG <DBKGn.DE>, according to court documents.

Remington disclosed the loan details in its Sunday bankruptcy filing, which the company said will allow it to cancel $775 million of debt and bring it out of Chapter 11 as soon as May.

Smaller banks Regions Financial Corporation <RF.N>, BB&T Corp <BBT.N>, Synovus Financial Corp <SNV.N> and Fifth Third Bancorp <FITB.O> have also committed to help fund Remington's bankruptcy loans, court documents show. An affiliate of investment manager Franklin Templeton Investments, another lender, is also providing funds.

Bank of America, Regions, Deutsche Bank, JPMorgan and Synovus declined to comment.

BB&T declined to comment on its lending relationships. The bank said part of its consideration is to listen to its clients and stakeholders, who have a wide range of opinions.

“We’re deeply concerned with the increasing amount of gun violence in our schools and communities,” the bank said.

The others, along with Remington, did not immediately respond to a request for comment.

The company ran into trouble after borrowing to ramp up production in 2016 in anticipation of greater industry demand, according to court filings.

The expectation of higher sales was in part driven by fears of a Hillary Clinton presidency and tighter gun controls. With the election of Donald Trump, who has said he strongly supports gun ownership, the firearms industry was stuck with a glut of weapons and higher levels of debt.

Remington, which said in January it was nearly out of cash, plans to tap the loans from the banks to help pay corporate expenses, including payroll, during its bankruptcy filing.

Remington's bondholders are also providing some of the bankruptcy loan and will receive a stake in the company when it exits bankruptcy.

Their identities were redacted in court documents.

The company also asked the court to seal the letters detailing the fees the lenders will earn from the loans, saying that the sums are commercially sensitive, according to filings in the bankruptcy court in Wilmington, Delaware.

The court records also showed that Remington's business faces new hurdles in the wake of the Florida shooting.

The company cited a risk to its business from restrictions placed on gun sales by retailers such Walmart Inc <WMT.N>, Dick's Sporting Goods Inc <DKS.N> and Kroger Co <KR.N>.

Walmart accounted for 11 percent of Remington sales in 2017, according to court documents.

Remington also said sales could be hurt by more government regulation, including enhanced background checks and a broader definition of "dealer" under current gun laws. Remington said if the 1994 federal assault weapons ban were re-enacted it would have an adverse effect on the business.

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Originally posted by gearhounds:

quote:

Originally posted by x0225095:

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Originally posted by gearhounds:
Let us hope that Marlin passes into the hands of an entity that knows what the hell they’re doing, at least in terms of how to manufacture lever action rifles. Remington did terribly.

Ruger is the logical recipient here when you consider the, seemingly, natural synergy of lever action rifles and Ruger’s single action and revolver offerings. I asked the CEO once (about 5-6 years ago) if lever action rifles were in their future plans and I got a very quick and very certain “No.”. Maybe now the price and time is right??

Ruger would be an excellent choice; the good thing for them is that the machinery to manufacture them is all fairly new CNC equipment. Tracking down all the highly skilled artisans that actually knew how to build Marlin lever actions would be my first step. Remington kicked so many knowledgeable craftsmen to the curb and the product line suffered immensely as a result.

Although I would hate to see Marlins stop being American made, I would not lose much sleep if Japan started making them...Winchester and Browning products have shown that they could do so successfully.

I believe you've identified the problems Remington had when moving Marlin to Ilion, but drawn the wrong conclusion about needing the workforce from New Haven. The New Haven workforce knew how to make good product on Marlin's dated, well-worn machinery that Marlin was using in CT. Moving the machinery to NY without the skilled operators was a disaster. Think post-it notes giving the Kentucky windage to the worn equipment, with the experience of the workforce making up the difference. As a result, the initial offerings from Marlington were crap. This is why the line was closed and retooled.

With the new CNC lines, the machines operate to spec and are way more precise. The existing workforce is plenty skilled to produce fine rifles. In fact, last month I handled a new production 1895, and it was very nice. Smooth, with great fit all around. I'd buy one in an instant.

Still hate the QR code and S/N laser etched on the receiver, though. Looks worse than a reflex sight on a lever gun. Why can't the S/N be roll-stamped on the under tang like is proper?

quote:

Originally posted by chellim1:
^^^
I noticed that too...
The Florida school shooting and the "March against gun violence" have absolutely nothing to do with the Remington situation.

Media engaged in blatant anti-gun propaganda.

Apparently, it is having an effect on the bankruptcy court negotiations:

"The court records also showed that Remington's business faces new hurdles in the wake of the Florida shooting.

The company cited a risk to its business from restrictions placed on gun sales by retailers such Walmart Inc <WMT.N>, Dick's Sporting Goods Inc <DKS.N> and Kroger Co <KR.N>.

Walmart accounted for 11 percent of Remington sales in 2017, according to court documents."

I did not know they still had 1,000 workers at the Ilion plant. However, I would not bet all those jobs will stay there.

I'll be in the area in two weeks and plan to visit the museum. Yes, I'll provide a report and photos.

http://www.syracuse.com/news/i...y_filing_tenney.html

No jobs losses in Ilion from Remington Arms bankruptcy filing: Tenney

Updated Mar 26; Posted Mar 26

By Rick Moriarty rmoriarty@syracuse.com,
syracuse.com

Ilion, N.Y. -- U.S. Rep. Claudia Tenney said Remington Arms has assured her that its bankruptcy court filing will not result in job losses at the gun-maker's big factory in the Herkimer County village of Ilion.

"Remington has reassured our office that the Chapter 11 filing is solely for the purpose of restructuring debt to equity," she said in a statement Monday. "There will be no job losses at the Ilion, NY, plant and at this time Remington has no plans to relocate the facility."

Remington Outdoor Co., the parent of Remington Arms Co., filed for reorganization Sunday under Chapter 11 of U.S. Bankruptcy Code. The company said it will turn over control to creditors as part of a plan that will allow it to cancel $775 million of debt.

The country's oldest gun-maker is headquartered in Madison, N.C., but employs approximately 1,000 people in Ilion, 69 miles east of Syracuse.

Reuters reported that Remington has obtained commitments for nearly $300 million from its existing lenders, after new sources of funding dried up in the months leading up to its Chapter 11 filing. Without the funds, Remington might have been forced out of business, Reuters said.

In addition to its heavy debt load, Remington has seen sales drop since the election of Donald Trump as president. His election apparently ended fears among gun owners that the federal government was going to restrict gun sales, leading to a drop in gun sales.

The company also is facing the possibility of revenue losses from restrictions placed on gun sales by retailers following a shooting that killed 17 people and wounded 15 others at Marjory Stoneman Douglas High School in Parkland, Fla., on Feb. 14.

Tenney, R-New Hartford, said Remington will be in much better financial shape following the reorganization.

"Once Remington successfully undergoes the Chapter 11 process, it will emerge more streamlined and stable for the future," she said.

quote:

Originally posted by sigcrazy7:

quote:

Originally posted by gearhounds:

quote:

Originally posted by x0225095:

quote:

Originally posted by gearhounds:
Let us hope that Marlin passes into the hands of an entity that knows what the hell they’re doing, at least in terms of how to manufacture lever action rifles. Remington did terribly.

Ruger is the logical recipient here when you consider the, seemingly, natural synergy of lever action rifles and Ruger’s single action and revolver offerings. I asked the CEO once (about 5-6 years ago) if lever action rifles were in their future plans and I got a very quick and very certain “No.”. Maybe now the price and time is right??

Ruger would be an excellent choice; the good thing for them is that the machinery to manufacture them is all fairly new CNC equipment. Tracking down all the highly skilled artisans that actually knew how to build Marlin lever actions would be my first step. Remington kicked so many knowledgeable craftsmen to the curb and the product line suffered immensely as a result.

Although I would hate to see Marlins stop being American made, I would not lose much sleep if Japan started making them...Winchester and Browning products have shown that they could do so successfully.

I believe you've identified the problems Remington had when moving Marlin to Ilion, but drawn the wrong conclusion about needing the workforce from New Haven. The New Haven workforce knew how to make good product on Marlin's dated, well-worn machinery that Marlin was using in CT. Moving the machinery to NY without the skilled operators was a disaster. Think post-it notes giving the Kentucky windage to the worn equipment, with the experience of the workforce making up the difference. As a result, the initial offerings from Marlington were crap. This is why the line was closed and retooled.

With the new CNC lines, the machines operate to spec and are way more precise. The existing workforce is plenty skilled to produce fine rifles. In fact, last month I handled a new production 1895, and it was very nice. Smooth, with great fit all around. I'd buy one in an instant.

Still hate the QR code and S/N laser etched on the receiver, though. Looks worse than a reflex sight on a lever gun. Why can't the S/N be roll-stamped on the under tang like is proper?

Clearly, precision manufacturing alone was not enough to successfully turn out a reliable product. There is more to assembling a lever action rifle than meets the eye; despite having state of the art machinery, Remington was still unable to manufacture them with the same rate of reliability that was possible with real craftsmen doing it.

My assertion is that by combining the kind of precision CNC tooling can provide with the fine tuning that properly trained craftsmen are capable of, Marlin rifles could potentially be better than ever.

Theoretically, a higher percentage of Remarlington rifles should have been free of issues than previously, but I have seen, and heard opinion of people I trust on newer guns that still exhibit flaws that should have had the bugs worked out by now.

I agree completely about the serial number location. Marlin actually started the trend (sans laser etched code) on the side of the receiver and it was not popular with purists.

quote:

Originally posted by RichardC:
Apparently, it is having an effect on the bankruptcy court negotiations:

"The court records also showed that Remington's business faces new hurdles in the wake of the Florida shooting.

Wouldn't it be malpractice for their lawyers to not make this argument? When a company's in trouble, troubles and their effects start piling up so that there's always something scary to point to. When a company can't sell one product, it sells another - regardless of why one product isn't selling.

quote:

Originally posted by Sigmund:

...Remington Outdoor Co., the parent of Remington Arms Co., filed for reorganization Sunday under Chapter 11 of U.S. Bankruptcy Code. The company said it will turn over control to creditors as part of a plan that will allow it to cancel $775 million of debt...

$775 million is a LOT, could that include some lawsuits?

A pal pointed out it was the Remington Outdoor Company, parent company of Remington Arms, that has filed for bankruptcy. Remington Outdoor Co owns these: Remington, Bushmaster Firearms, DPMS/Panther Arms, Marlin, H&R, The Parker Gun, Tapco, Advanced Armament Corp., Dakota Arms, Nesika, Stormlake, Timbersmith and Barnes Bullets.

https://www.remingtonoutdoorcompany.com/

Perhaps someone can explain how/if the parent company filing for bankruptcy affects all the "sub" companies it owns.