Colt Manufacturing LLC. strikes 11th hour deal to save the company.
On Nov. 12, 2014 Colt Manufacturing announced that it may not be able to make its 10.9 million dollar bond payment due on Nov. 17. The earth shook and Colt’s stock prices dropped to 35 cents. With a 30-day grace period they would have until Dec. 15 before they defaulted on their loan.
Just one day into the grace period, Colt announced that they have struck a new deal with Morgan Stanley for $70 million to make the payment and cover the rest of the $50 million term loan. The loan also allows them to continue to support medium and long term goals.
Colt, who has been making guns since 1836 and supplying them to the U.S. military since 1847, claims that delays in sales to the U.S. government hurt business along with a decline in demand for rifles and handguns.
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Colt is not out of the water yet as they expect to see a decrease in operating income compared to last year and expect a loss for the first nine months of the year.