Colt’s last-ditch effort before bankruptcy

Discussion in 'Lounge' started by lklawson, Apr 23, 2015.

  1. lklawson

    lklawson Staff Member

    Colt’s last-ditch effort before bankruptcy

    4/22/15 | by Daniel Terrill
    The ailing Colt Defense is trying to dig itself out of a deep hole, and while the gun company is charted for bankruptcy, it’s trying to make the process as painless as possible.

    Colt started last week by offering investors an opportunity to exchange old bonds for new, less lucrative ones, which are due to payout at a later date as a means to restructure debt. The new notes will mature in 2023 instead of 2017 and at a higher interest rate. Unlike the old notes, they will allow the company to keep its assets if things fall apart. In other words, debtors won’t be able to liquify the iconic American gun company.

    But success for the exchange offer is dependent on current bondholders. The company needs to recover a very ambitious 98 percent of the old notes otherwise the company will likely set a course for bankruptcy.

    If bankruptcy is the future, Colt will follow a prepackaged plan of reorganization, however, the plan needs approval by current bondholders.

    Part of the prepackaged plan includes canceling the old notes plus the accrued and unpaid interest, and replacing them with a proportionate share of new notes.

    A prepackaged bankruptcy plan allows a company to coordinate with its creditors before officially declaring bankruptcy. It’s a way to save money on legal and accounting fees, and also can result in a quicker recovery.

    Colt has not made any affirmative decision to proceed with any bankruptcy filing at this time, but if it does, the decision will likely come after May 11, the deadline for current bondholders to exchange notes.

    The Connecticut arms maker has been heading in this direction most notably since November 2014, when it almost missed a semi-annual payment to bondholders. It has since been swapping debt for debt in order to make necessary payments.

    Earlier this month Colt failed to deliver annual financial statements, which are required per terms of a loan agreement by the issuer. The company waived the rule, citing miscalculations with employee retirement pensions.

    In March, Colt hired financial restructuring firm to review the company’s financial results, projections and operational data. The month before, Colt secured a $33 million loan but said it would likely miss May’s semi-annual $10.9 million senior notes interest payment — something it will probably still miss.

    In 2014’s third quarter, Colt reported a net loss of $7.8 million, down from $11.3 million profit in 2013. Net losses nine months into 2014 come at $28.4 million, down from a $20.4 million profit in the same timeframe the year before.​

    Peace favor your sword,
    Kirk
     
  2. lklawson

    lklawson Staff Member

    I was hoping that the reintroduction of the Pony and related pocket options would save them but it looks like it might not be enough. I guess there's just not enough demand for "genuine Colt 1911's" and the Pony/Pocketlite. I think they make AR's, right? IMS, they were heavily dependent on a gvt contract which got canceled. Now they're going to be forced to innovate or die.

    I wonder if an Angel Investor group will save 'em or maybe they'll get bought by Freedom Group and added right beside Para and Remington?

    Peace favor your sword,
    Kirk
     

  3. Think1st

    Think1st Supporting Member

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    That's the problem with basing your business model on one big customer. When that customer goes, you are done. No one should ever expand a business just on account of one customer unless there are plans to expand to a broader customer base at the same time.

    I could see Colt getting rolled up by Freedom Group.
     
  4. cicpup

    cicpup Resident PITA Supporting Member

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    To be honest, it's just a status symbol now. There's plenty of companies making just as good for less.
     
  5. they are done.

    the colt name has not been worth what it once was. And they REFUSE to acknowledge that. there guns are still outrageously priced. and they aren't bringing ANYTHING new to the table besides a pocket gun.

    They should have brought back there DA revolvers, that is what everyone is asking for.
     
  6. papataylor

    papataylor Member

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    Won't happen. Too much investment costs for tooling, training, materials, etc.

    What they could've easily done is expanded on the pocket rocket market. The mustang and mustang XSP are easily the nicest pocket guns (kimber is right there with them) as far as shoot ability and reliability. But pricing wasn't ideal. They new xsp "lite" is too late to the show to get new customers on bored now.
     
  7. Maybe Obama will rescue them like GM...:rofl:

    I am still baffled that they did not bring back DA revolvers. Yes they cost more to manufacture, but the demand for them at high prices is still there. Also they should have developed poly guns in all size ranges at reasonable prices. The same way S&W did to pull their selves out of a bind.

    Most of the guns in their lineup are made by other companies for less. Hopefully when they are bought out the new owners will bring back innovation, and those old classics that are not offered by someone else.
     
  8. HiPointArmorer

    HiPointArmorer Member

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    Id would be so happy to see the M16/M4 go, our troops deserve a better rifle. How is it that DOD approves trillions for fighter jets that wont be ready for another thirty years but cannot get a better service rifle. M16 is prone to over-heating, has to be 100% clean to perform reliably, spraying oil in the thing just makes it worse. M4 isnt any better with the short barrel, since when does the Army engage the enemy are close range...my point is they shouldn't get that close.
     
  9. Django

    Django Member

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    Its a shame. The Colt brand was the gold standard when I was growing up. Whether it was the 1911, revolver or AR. End of an era. Like others have mentioned, I'm assuming it's going to be rolled into The Freedom Group.
     
  10. lklawson

    lklawson Staff Member

    Apparently it's pretty common in Iraq and Afghanistan.

    Peace favor your sword,
    Kirk
     
  11. Think1st

    Think1st Supporting Member

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    The M4 is waaay better with its short barrel. It is still effective against point targets at a range of 550 meters (according to the book). As far as close range goes, I consider inside of buildings to be close range, and there is plenty of that to face.

    A shorter barrel also makes life a lot easier getting in and out of vehicles, particularly HMMWVs.
     
  12. HiPointArmorer

    HiPointArmorer Member

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    Common misconception, Iraq is a desert...most Army outpost are out in the middle of no-where. Its true that there was a lot or urban fighting during the invasion, but that quickly changed. An AK can fire 140 rounds per minute, M4 half that if your lucky on a good day. In the mountains of Afghanistan, you really want that extra range with the longer barrel. Most of the outpost there are in canyons deep in the mountains.
     
  13. Think1st

    Think1st Supporting Member

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    You go ahead and haul around that musket-length pike of crap if you like. Someone who shall remain nameless decided that a bunch of brand new M-16a4 rifles would be the bees knees for advisors to take to Iraq some years back, and they sucked. They took up waaaaaay too much space in our 1114s. Needless to say, We got rid of them as quickly as we could.

    Sure, they would have been great if we were a bunch of designated marksmen, but the M4 reaches out far enough for typical engagements. Even in open areas, fire and maneuver techniques will not require the longer barrels. I don't know what kinds of engagements you envision, but most riflemen won't be straining to pick dudes off at 300+ meters with head shots.
     
  14. ajole

    ajole Supporting Member

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    Well...that's a full on load of baloney.:cool:

    I mean seriously...not ONE single thing was correct in that entire post.:rolleyes:
     
  15. Think1st

    Think1st Supporting Member

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    Well, saying that the troops deserve something better than the M-16 or M-4 is a bona fide fact. Direct impingement is great for a precision rifle, but the resulting fouling in the action and faster heat buildup are just atrocious. That is why I bought my Adams Arms piston upper. I have to say that cleaning it after a range session is an absolute breeze. I clean a little carbon from the bolt face and the star chamber, and the rest of it is just some easy wipe-down.

    The Army was testing the H&K 416 for awhile, and the results were great. The Tier One units got it, but the rest of the conventional units didn't, which is unfortunate.

    I would actually like to see the DoD adopt the ARAK-21. Give me a few minutes to look up the link to post here...

    Edit: Here is the link. I really want one of these:

    http://www.faxonfirearms.com/
     
  16. HiPointArmorer

    HiPointArmorer Member

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    I don't speak for everyone, just my opinion based on what I had to train and deploy with. I had to lug a M249(dead-weight) around in Iraq but was a sharpshooter with the M16A1. Why cant we get a light weight weapon that can do both? Something versatile that can be easy adapted, depending on the mission? I thought the XM-8 was cool.

    [​IMG]

    Afghanistan, what do you see here, full length barrels and scopes:

    [ame="https://www.youtube.com/watch?v=wiXoSrbr6Dg"]https://www.youtube.com/watch?v=wiXoSrbr6Dg[/ame]
     
  17. Rachgier

    Rachgier Administrator Staff Member

    Uhm, I see a bunch of 16"-ish barrels with 8" hand guards and a couple of guys with DMR's that resemble an MK11 Mod 0.
     
  18. who knows. maybe they wanted bankruptcy.
    They had debt, they wanted to start over as best they could without it. so why innovate and pull yourself up by the boots. when you can just do a hard reset.

    That's all conjecture. but thats all any of us can do.
    I peronsally think they should have brought back the python. its iconic. its stop in production has people paying 2,000 for a python and it is thought to be "well worth it"
    yet they still make SA? what a joke. only 1911's and pocket rockets? Make some plastic fantastics with a f*cking pony on the side. people will eat them up.

    The fact that the didnt try ANY of tht makes me think they were okely dokely with shutting down.
     
  19. papataylor

    papataylor Member

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    That's my thoughts. Colt as a brand is too reputable and profitable to let die.

    They've hired on a lot of marketing experts recently. I'm thinking they're putting the right people in the right place and waiting on a conglomerate to buy them up so they have sound financial backing before doing anything expensive or experimental.

    While this runs the risk of killing the company, it just may work and bring on a new era, and a better than ever Colt.

    It's really a shame. They make unparalleled quality firearms. The 90's were rough but the new stuff is hard for anyone to compete with, especially the custom shop usmc 1911 and mustang line.

    I personally ran through every pocket rocket on the market before settling on the mustang xsp. Better trigger and accuracy than the sig 238, far better ergo's, machining, shoot ability (basically everything) than the lcp, 3AT, tcp, etc.

    The only thing close to it in ergo and accuracy is the 42, which size isn't even comparable.

    I've landed 100m shots on steel silhouettes with the xsp. Never had a hiccup with any type of ammo, and I'm not alone in that.

    Customer service is upstanding. The custom shop guys offered to refinish my Pocket Nine, that experienced some putting inside the slide from having sat for so long, just to work on one of the early, unfired examples. I left it original.

    A few guys at the colt forum experienced first round hang ups with fully loaded mags. Colt sent them 2 new factory mags hand fitted for free, even pick up shipping.

    They'll still be around.
     
  20. lklawson

    lklawson Staff Member

    Darn straight! They could probably recover solvency on Walking Dead fans alone. :)

    Peace favor your sword,
    Kirk