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June 5, 2015

Ch. 11 looms for gunmaker Colt

Contributed photo A Colt 45-caliber automatic handgun, which is made at Colt's West Hartford facility.

West Hartford gun manufacturer Colt Defense may be headed for Chapter 11 bankruptcy protection if it fails to restructure outstanding debt, a regulatory filing says.

Colt has extended to June 12 its deadline for investors to exchange their old debt notes for new ones, the company said in a U.S. Securities & Exchange Commission filing Friday.

But unless investors tender 98 percent of the notes — worth approximately $244 million — Colt said it will consider filing for bankruptcy reorganization. As of June 1, investors had tendered less than 6 percent of the old notes, Colt said.

Should the company file for bankruptcy, it said it would continue ordinary operations, and that trade creditors, vendors, customers and employee wages and salaries would be unaffected.

Chapter 11 is a shield from debt collectors and other creditors while a company works on a court-approved plan to repay them.

In April, Colt commenced an exchange offer to entice investors to trade in 8.75 percent senior notes due in 2017 for 10 percent notes due in 2023. The company this week shortened that maturity date to 2021.

Its goal is to reduce its overall debt and interest payments, and position itself for more attractive financing in the future.

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