Colt Defense, the legendary US gunmaker made famous by the eponymous pistol, is facing collapse unless creditors agree not to pull the trigger on a bond payment.
The company has filed for bankruptcy protection while it tries to win support for a debt restructuring from bondholders.
Failing that, it will put itself up for sale in bankruptcy, according to the Wall Street Journal.
Colt owes more than US$100 million in secured debt and US$250 million in bonds, and is racing against time.
It’s targeting an Aug. 3 auction which has drawn an opening buyout offer from Sciens Capital Management, its private equity backer.
The company has won US$20 million in financing to continue operating while in bankruptcy and expects to remain in business after the restructuring, WSJ says.
Colt was founded in the 19th century in New England and developed “the gun that won the West”.
It enjoyed a successful run in the late 1990s and early 2000s as supplier to the US military of the M4 line of firearms widely used by frontline troops.
But in recent years, Colt has been dogged by supply problems and money issues, faltering rifle sales and the loss of a key US Army contract in 2013 for the M4.
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