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, Reuters reported yesterday. Sales of Colt's modern sports rifles and handguns fell 30 percent last year and the company's cash had dwindled to $11.1 million by May 22, according to regulatory filings. Colt Defense LLC, 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 with Colt 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. 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. Without near unanimous bondholder consent by Saturday, Colt could opt for bankruptcy, according to regulatory filings.
