Remington’s parent company Spectrum Brands, yesterday filed voluntary petitions for reorganisation under chapter 11 in the US bankruptcy court for the Western District of Texas, San Antonio Division.

The reason for this move is “to significantly reduce the company’s outstanding debt and put the company in a stronger financial position for the future,” according to a statement from Spectrum.

A refinancing on the agreed terms would enable Spectrum Brands to reduce the amount of debt on its balance sheet by approximately $840 million (or approximately one-third).

It will also allow them to eliminate approximately $95 million in annual cash interest payments for at least each of the next two years, and free up additional cash that can be reinvested in its business to support meaningful revenue and profit growth.

The Company currently has outstanding debt of approximately $2.6 billion.

Spectrum Brands and all of its operating units in the U.S. and around the world expect to continue to meet their respective obligations, subject to applicable limitations, to their suppliers, customers and employees in the ordinary course of business during the restructuring process, which is expected to occur over the next four to six months.

“Our businesses have attractive growth prospects that have been encumbered by the level of debt the parent company is carrying. After careful consideration, we decided that the approach announced today would be the most effective and expedient path for us to develop a more appropriate capital structure to support our long-term business objectives,” commented Kent Hussey, CEO of Spectrum Brands.

“We have no current plans to make any significant operating changes to our business units, which have been profitable and have generated positive cash flow, and are meaningful competitors in their respective industries.”

Despite the economic slowdown, Hussey commented that he sees bright spots in the future outlook of the company.