Colt said it intended to continue normal business operations through the accelerated sale process with the help of $20 million in credit facilities that its existing lenders have agreed to provide.
Sciens Capital proposed to buy all of Colt’s assets and assume secured liabilities and those related to employees, customers, vendors, and trade creditors, Colt said in a statement.
Colt’s decision to seek bankruptcy protection isn’t a surprise, as the gunmaker missed a payment in May to holders of $250 million in bonds it has issued, Reuters previously reported.
Sales of Colt’s modern sports rifles and handguns fell 30 percent last year and cash dwindled to $11.1 million by May 22, according to regulatory filings.
Colt Defense, 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.
The current management team led by President and CEO Dennis Veilleux will remain in place throughout the process which is expected to be completed within 60 to 90 days, Colt said.
Perella Weinberg Partners LP served as financial advisor to the company, while Mackinac Partners LLC served as the restructuring advisor.
The case is in U.S. Bankruptcy Court, District of Delaware, Case No: 1:15-bk-11287.
(Reporting by Subrat Patnaik in Bengaluru)