Following a piece authored by Jim Shepherd at the Shooting Wire, the Old Fuff learns that the soap opera that is Colt is continuing - but may come to a head in 5 days (June 15th, 2015).
Jim in turn got his information from Reuters Financial, where the following was posted yesterday.
Gun maker Colt heads toward bankruptcy showdown with bondholders
WILMINGTON, Del. | By Tom Hals
Obviously the situation does not look good. Well to start with:
But the company is still optimistic.
But the bondholders that have an investment stake in Colt see things differently.
So the bondholders are not jumping on the bandwagon to take this offer:
So what will probably happen if the bondholders stand firm - as they appear to be doing?
Supposedly June 15, 2015 is the absolute deadline - be we've heard that before. Maybe by next Monday, give-or-take we may finely know what's going to happen, but don't bet on it. :banghead:
http://www.reuters.com/article/2015/06/09/us-coltdefense-bankruptcy-idUSKBN0OP1YN20150609
Jim in turn got his information from Reuters Financial, where the following was posted yesterday.
Gun maker Colt heads toward bankruptcy showdown with bondholders
WILMINGTON, Del. | By Tom Hals
Famed U.S. gun maker Colt appears to be headed into a bankruptcy duel in the coming week if its private equity backers and bondholders cannot overcome widely differing views on the best way to heal the company's financial wounds.
Obviously the situation does not look good. Well to start with:
Colt Defense LLC [CDEFHC.UL], whose M1911 was the primary sidearm for the U.S. military for most of last century, missed a $10.9 million payment last month to holders of $250 million in its senior bonds.
But the company is still optimistic.
Colt is forecasting sales growth of 24 percent in 2015 and 2016, the company's private equity owners, Sciens Management, intend to retain ownership, even if bondholders get stuck with big losses.
But the bondholders that have an investment stake in Colt see things differently.
"Their (Colt's) message to creditors is to take the 45 cents or get flushed," said Leonard Klingbaum, a partner with Willkie Farr & Gallagher, who is advising lenders in the talks.
So the bondholders are not jumping on the bandwagon to take this offer:
The West Hartford, Connecticut-based company has proposed issuing $450 of new securities for every $1,000 of outstanding bonds - a 55 percent discount. Colt has said that as of June 1, it has the consent of just 5.9 percent of bondholders, represented by the law firm Brown Rudnick.
So what will probably happen if the bondholders stand firm - as they appear to be doing?
If bondholders reject the debt-cutting plan, Colt has said in regulatory filings it will sell its assets in bankruptcy, with the possibility that no bid will be enough to cover the company's $105 million in secured debt, leaving nothing for bondholders.
Supposedly June 15, 2015 is the absolute deadline - be we've heard that before. Maybe by next Monday, give-or-take we may finely know what's going to happen, but don't bet on it. :banghead:
http://www.reuters.com/article/2015/06/09/us-coltdefense-bankruptcy-idUSKBN0OP1YN20150609