HK HUNDREDS OF MILLIONS IN DEBT: German Firm Heckler & Koch Reportedly €170 MILLION

H&K was probably the most outstanding name in tactical firearms manufacturing in the '80s, but what have they done lately?
 
HK fired their CEO on Aug 29th. I just posted the article because of all the large firearms manufactures in financial trouble, even though they have large military contracts. That's what blows me away.
 
Rebel Rouser said:
HK fired their CEO on Aug 29th. I just posted the article because of all the large firearms manufactures in financial trouble, even though they have large military contracts. That's what blows me away.
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I haven't looked up the details of their debt, but a quick glance of their top pages in the FS shows that they are not in financial trouble as long as they can keep up their current revenue level and gross profit margin.

As long as they have positive cash flow all the time to service the debt HK will be around. It is expensive. Their current owners probably don't like it. On the other hand, they probably bought it at a low price so it is almost they are paying a very expensive mortgage for their purchase of the company.
 
HK. Always have to copy Colt's. First they try to make an M4, then they try to copy the debt. Maybe they can come out with an offshore manufactured wheelgun.
 
can14 said:
Screwing the shareholder isn't going to help the company by issuing additional shares
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In this case I bet it is the shareholders that are trying to cut the company's debt costs by injecting capital to the company. HK has very few shareholders IIRC, it is a privately held company so dilution is not an issue here unless they found an external investor to inject the money. It is just a mechanism to increase the equity account

Think of this as, instead of paying expensive interest for a debt to the outsider, they are giving money to the company to pay down the debt.

This is actually positive news for HK. It looks like they are committed to find a solution to the debt or at least to control it, so the company are less restricted by the debt covenant and the crunch time of rolling the debt forward. That's the issue that drove Colt USA to chapter 11 and HK is doing things to make it less likely.
 
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