One of the most iconic firearms manufacturers is preparing to file for bankruptcy. Last week, Remington Outdoor announced its intention to file for Chapter 11 bankruptcy protection after reaching an agreement that transfers ownership of the 200-year-old company to its lenders.

Remington has a $950 million debt pile, according to Reuters, and has been working with investment bank Lazard Ltd on options to restructure. The company, which is controlled by Cerberus Capital Management LP, lost private equity fund investors following the link between the Sandy Hook elementary school shooting and the fact that one of Remington’s Bushmaster rifles was used. Sources told Reuters that because of “the reputation risk” many credit funds and banks haven’t come forward to help Remington.

CBS News reports that “holders of Remington’s $550 million term loan will get an 82.5 percent equity stake in the gunmaker” while “third-lien noteholders will get 17.5 percent of Remington and four-year warrants for a 15 percent stake.” Creditors will issue a $100 million debtor-in-possession loan so that Remington can operate during bankruptcy proceedings.

Stricter gun control may have also played a role in the bankruptcy as Remington’s sales have declined due to the possibility of stronger regulations. During the first nine months of 2017, the gun manufacturer’s sales dropped by 27%, which resulted in a $28 million operating loss, Reuters reports.

“Difficult industry conditions make today’s agreement prudent,” Jim Geisler, executive chairman of Remington, said in a release.

Stay tuned to GOHUNT for further information.