“Governor Rick Scott announced in 2011 that Colt was bringing 60 high-paying jobs to Kissimmee and would occupy a building that cost taxpayers $1 million,” wftv.com reports. “‘I called the company to make sure they were coming,’ Scott said in 2011. But Colt never came to central Florida and the building still sits empty more than two years later, angering taxpayers and job seekers . . . The county is drafting a notice of default letter to Colt. It’s the first step towards evicting the company from the building.” This following news that Colt made a last-minute deal to save its skin. According to thedeal.com . . .
The refinancing climate is so good for middle-market companies that one of them, Colt Defense LLC, announced a refinancing on the same November day an interest payment was due.
The West Hartford, Conn., firearms manufacturer, which is majority-owned by New York private equity firm Sciens Capital Management Group, secured on Nov. 17 a new $70 million loan from Morgan Stanley Senior Funding Inc., allowing it to make a $10.9 million interest payment that same day on its $250 million in senior unsecured notes due Nov. 15, 2017.
Colt had warned on Nov. 12 that it didn’t have the funds to make the interest payment and that it was facing a covenant breach on its $50 million senior secured term loan from Cortland Capital Market Services LLC. The new financing allowed Colt to make the interest payment and repay its term loan before the covenant violation.
Which is all well and good, but one wonders how the storied firearms manufacturer can take in more money than it spends, what with the general slump in the U.S. gun biz and America’s shrinking commitment to overseas adventures. Back in May, when the downturn hit home, Colt’s first quarter revenue fell 22 percent to $50m. The company suffered a $7.8m loss for the period.
As finance.townhall.com pointed out last summer, Colt’s flirtation with bankruptcy is nothing new. Nor is its over-reliance on crony capitalism (i.e. government contracts). Moving forward, the Connecticut company’s going to have to find a way to connect with consumers. Good luck with that. No seriously. Good luck. [h/t SS]