http://www.bloomberg.com/news/articles/2015-06-15/colt-defense-179-year-old-gunmaker-files-for-bankruptcy
Bye bye...too much competition. Not enough demand.
Bye bye...too much competition. Not enough demand.
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“Colt remains open for business,” Chief Restructuring Officer Keith Maib said in the statement. The plan will allow the company to restructure its balance sheet, he said.
"Not enough demand and too much competition..."
Didn´t Colt just make a deal for $22.5mil.with the USMC for a new M45 pistol?
It looks like Sciens Capital Management is seeking to buy Colt's assets - probably strip out some of the debt as part of the asset sale.
Over the next several years, Colt Defense went through the private equity leverage wringer. Sciens Capital and its affiliates loaded the company with debt while taking out cash in the form of “distributions” and “advisory fees.” The 2005 SEC filing shows payouts totaling $40 million over the two prior years—a significant amount for a company in such fragile financial health. In 2006, another SEC filing shows, the company redeemed “members’ equity” worth $41 million. In 2007, Colt Defense agreed to borrow $150 million in a “leveraged recapitalization” that featured distributions to “members” of $131 million.
In 2009 it borrowed an additional $250 million, while multimillion-dollar payouts continued. For 2010, Colt Defense had sales of $176 million—more than double what they were in 2004—but registered an $11 million loss. “You didn’t have to work at Colt Defense to know it had put itself in a dire situation,” says Merrick Alpert, a Connecticut businessman who began advising the shriveled remains of Colt’s Manufacturing in late 2010 and later became its senior vice president.
I thought Colt was about 85% owned by Zilkha & Co, and run by Donald Zilkha. What makes you think that it is owned by Sciens Capital Management?
After the dust settled, Sciens Capital and its affiliates controlled the defence company, although Zilkha retained an ownership interest.
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As bitter as their relationship had become, Rigas and Zilkha collaborated in 2012 on a mutually remunerative recombination of the Colt companies.
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Contacted via email, Zilkha later said: "I resigned from the board of Colt Defense in 2006 and hold a minor interest in the business.