Reading about the problems of the Heckler & Koch in Germany regarding their financial predicament according to The Firearm Blog, it's rather unbelievable for one of the best known and well-admired firearms company in the world is in such a situation. But the best way really is to check the link as provided by the Blog.

According to German newspaper Die Welt, Heckler & Koch is deep in debt but they expect business to improve in the coming years, and that it is in no way insolvent. It is not really a cause for alarm in cases for a company that relies on institutional sales, in this case, government sales, as contracts run into years and the losses are caused by delayed deliveries in 2011 gun sales.  This means that such delays can cause delayed payments and a company sometimes has to resort to borrowing to finance production to meet delivery goals. With this problem high interests charges are exacted by the lenders and impairment losses also amounted to millions caused by complex financial transactions.

(Heckler & Koch German Headquarters)

The company HQ has reported 7.2 million euros in negative equity and one of the owners was sued by hedge funds in 2010 for diverting funds for personal purposes which is vehemently denied and the lawsuit not admitted in New York.

Nevertheless, the company is expecting better business in the future with a contract to supply the Bundeswehr 12,500 MG5 machine guns worth over 140 million euros and they will be issuing a corporate bond and getting a PIK (Payment In Kind) loan which is high interest and considered to be riskier.

According to The Firearm Blog, the problems of Heckler & Koch Germany does not affect Heckler & Koch USA which has a healthier firearms market due to the civilians being allowed to purchased firearms apart from institutional clients.