Remington Outdoor Co. Inc., as expected, filed for bankruptcy protection Sunday, March 25, in Delaware to execute a debt restructuring deal.
The company announced that it has filed a prepackaged plan of reorganization with the United States Bankruptcy Court for the District of Delaware under Chapter 11 of the United States Bankruptcy Code. As previously disclosed, the company and certain of its subsidiary and related entities as well as its consenting creditors, entered into a Restructuring Support Agreement on Feb. 11. The RSA and the plan of reorganization represent the collective commitment of those parties to improve the company’s financial structure and to solidify the company’s long-term future. Upon emergence, expected within 45 to 60 days, Remington expects to have cancelled approximately $775 million of existing debt while raising $155 million of the new money plus $193 million in a rollover asset based lending facility.
The company noted that this process of restructuring its financial position is discretely focused on establishing a sustainable and healthy capital structure. It is not anticipated to have any impact on its operations, employees, customers, business partners or suppliers.
Jim Geisler, executive chairman of Remington Outdoor, commented, “I want to thank our many employees, customers and suppliers for their loyalty during this process. We have seen it over the last several months in our steadying sales performance, new customers and high employee retention rates. This strong community enables us to bridge Remington’s proud history to its bright future.”
Anthony Acitelli, Remington’s CEO, added, “We have designed a new and enabling capital structure. We will be positioned to grow our business, continue to innovate and introduce new products, to expand our partnership with new and existing customers and to capture opportunities in new markets. We are confident that we will continue our long-held leadership position in the sporting goods industry and that we will persevere to remain in the company of the most venerated, respected and admired brands and companies in the United States.”
In order to implement the RSA, the company will submit a prepackaged plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. The company believes this legal process provides the most efficient, effective and timely path toward the completion of the company’s financial restructuring. The submission of the company’s “prepackaged” plan demonstrates firm, collective support from the company’s lenders and shareholders and a shared desire to protect a valuable company and the interests of its customers, vendors, partners and the many communities it has served and from which it has drawn strength over nearly two centuries of operations.
Under the plan of reorganization, Remington will be provided with access of up to $338 million in debtor-in-possession financing, $193 million more than originally specified in the RSA, as it proceeds through the financial restructuring process. This interim financing is sufficient to ensure the business has the necessary working capital to continue normal, undisrupted day-to-day business operations. Upon emergence, the company will continue to have access to its $193 million ABL revolver.
The company will also make customary first-day filings with the court to help advance a smooth and timely process and to enable the court to act promptly following the filing.
Remington’s legal counsel is Milbank, Tweed, Hadley & McCloy LLP, its investment banker is Lazard, and its financial advisor is Alvarez & Marsal Capital Partners. The Term Loan Lenders’ legal counsel is O’Melveny & Myers LLP and their investment banker is Ducera Partners LLC. The Third Lien Noteholders’ counsel is Willkie Farr & Gallagher LLP and their investment banker is Perella Weinberg Partners L.P.