Is a $20 Million Lifeline Enough to Save Colt, the Iconic But Bankrupt American Gunmaker?

Earlier this month, Colt, the iconic American weapons maker, declared bankruptcy, after being unable to pay $350 million it owes creditors. Late Wednesday, the 179-year old company got a very short financial lifeline.

The company announced it has received a $20 million line of credit from financiers to continue operations as it tries to navigate its way back into the black. Colt says this is enough to keep up with prior obligations to its workers, vendors, suppliers, and customers.

The announcement “underscores that nothing has changed in our operations, as we remain sharply focused above all on delivering for our customers while also being a good commercial partner to our vendors and suppliers,” Keith Maib, chief restructuring officer of Colt Defense, said in a statement.

Whether this will be enough to save the company, whose weapons are credited with winning the American West, remains to be seen. It’s fallen out of favor with the Pentagon — in 2013, it was passed over for a $77 million DoD weapons contract in favor of a Belgian manufacturer, F.N. Herstal. American law enforcement officials are also giving up on Colt guns.

The company, which invented the “Peacemaker” revolver that was once used by American legends like the Texas Rangers and John Wayne, has proven resilient in the past. It emerged from a bankruptcy once before, in 1994.

This time might be different, however. The loss of the military contract in 2013 was a major blow to the arms maker, which has been supplying weapons to the Pentagon for decades. During the wars in Iraq and Afghanistan, Colt weapons were unreliable: the guns failed during a 2007 “extreme dust test” meant to measure how the arms perform when dirty. There also have been numerous complaints from soldiers that the guns don’t perform well when unclean. Army special forces subsequently dropped Colt weapons.

“The Army’s Delta Force replaced its [Colt] M4s with the H&K 416 in 2004 after tests revealed that the piston operating system significantly reduces malfunctions while increasing the life of parts,” the Army Times reported back in 2007.

Abandoned by the military, the Connecticut-based company has looked to grow its business overseas. In May, it agreed to sell $36.1 million worth of weapons to Jordan, Antigua and Barbuda, Belize, Colombia, Hungary, Oman, Panama, Senegal, Lebanon, and Romania.

But without the steady stream of Pentagon money, Colt guns might be best remembered for their place in U.S. history, not their role in future wars.

Photo Credit: Karen Bleier/Getty Images