Remington Outdoor Co. said it’s planning to file for bankruptcy protection after reaching a deal with lenders that grants them ownership of the 200-year-old company.

A prepackaged reorganization will be filed with the U.S. Bankruptcy Court in Delaware, according to a statement from Remington, which is controlled by Cerberus Capital Management.

Under the restructuring, holders of Remington Outdoor ‘s $550 million term loan will receive an 82.5 percent equity stake in Remington while third-lien noteholders get 17.5 percent of the company and four-year warrants for a 15 percent stake.

Creditors will also provide a $100 million debtor-in-possession (DIP) loan to finance operations throughout bankruptcy. Upon exiting bankruptcy, the DIP term loan will be converted into an exit term loan.

With the consent of a majority of the holders of the term loans and the third lien notes, Remington Outdoor will provide a $45 million delayed draw first-out first lien term loan to the operating company. This facility will roll into a DIP term loan upon the Chapter 11 filing.

In sum, the plan is designed to reduce approximately $700 million of Remington’s debt and support the contribution of $145 million of new capital into Remington’s operating subsidiaries, markedly strengthening the company’s consolidated liquidity, balance sheet and long-term competitiveness.

Rumors of a potential bankruptcy filing have been swirling for several weeks.

Executive chairman of Remington Jim Geisler, commented, “Difficult industry conditions make today’s agreement prudent. I am confident this regrouping ensures that Remington will continue as both a strong company and an indelible part of our national heritage.”

“Importantly, the fundamentals of our core business remain strong,” added Anthony Acitelli, Remington’s CEO. “We have an outstanding collection of brands and products, the unqualified support of a vibrant community across the industry and a deep and powerful culture. We will emerge from this process with a deleveraged balance sheet and ample liquidity, positioning Remington to compete more aggressively and to seize future growth opportunities.”

In late October, Acitelli, who most recently served as CEO of Taurus Holdings, was appointed CEO.

In the nine months ended October 1, Remington Outdoor showed a net loss of $60.5 million against earnings of $19.1 million in the same period a year ago. Revenues slumped 27.5 percent to $466.7 million.

According to a new regulatory filing detailing the restructuring plan, preliminary results show sales in 2017 reached $603.4 million against $865.1 million, a decline of 30.2 percent.

Gross margins are expected to reach 20.9 percent versus 27.4 percent a year ago. EBITDA is expected to be $33.6 million against $119.8 million, a decline of 86.3 percent.

Like many in the shooting industry, Remington’s fortunes took a hit after the election of Donald Trump.

Gun sales spike on the election of candidates who are perceived to be more likely to pursue more stringent gun control laws.

Firearm background checks had risen steadily for at least a decade and spiked just before Trump’s election, with many expecting a Hillary Clinton victory.

The opposite has occurred since the election of Trump as firearm background checks declined faster in 2017 than in any year since 1998, when the FBI first began compiling the background check data. Trump became the first sitting president to address the National Rifle Association in three decades. He told members at its annual meeting last spring, “You have a true friend and champion in the White House.”

Beyond presidential politics, Remington Outdoor has been hit with lawsuits filed following the 2012 Newtown school shooting tragedy in which 20 first-graders and six educators were killed. The company’s Bushmaster AR-15-style rifle was used in the attack.

The company was cleared of any wrongdoing in the shooting, but investors, repulsed by the massacres, distanced themselves from the company’s owner, investment firm Cerberus Capital Management, and the company has faced challenges lining up investors.

Unable to find a buyer after the massacre, Cerberus Capital enabled investors to sell their stakes in the company, Remington Outdoor, formerly the Freedom Group, and moved the manufacturer out of its funds and into a special financial vehicle.

Cerberus acquired the gun maker in 2007, just when gun sales began to skyrocket under the Obama administration.

Photo courtesy Remington Arms