Ruger raising cash?

[Gorthaur]

I just saw on Dow Jones newswire that Sturm Ruger & Co. has sold its Uni-Cast aluminum casting unit. Ruger retains the land and buildings, and will buy pistol frames from Uni-Cast. I wonder what they're up to? Maybe raising cash to buy another company?

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[Lavan]

And maybe just getting liquid so they can sell the land with a non-seller tenant.

 

[Jeff OTMG]

Asset divestiture. If Ruger loses the suits in court the casting company and its capital assets would be part of Ruger's value and ability to pay the judgement. By breaking up a company and removing all capital assets beyond what is necessary to operate it is easier to bankrupt the company. The bankruptcy would allow the continued operation of the company and put the judgements at the bottom of the list of creditors. Smart move. The building and real estate is probably already owned by another division of a holding company. Colt is doing much of the same thing.