Economics: banks keep up pressure on Carlyle
The Carlyle Group says it has failed to agree terms with bankers to try to stave off margin calls and demands for liquidation of assets to reduce banks' exposure to falling asset prices in its Carlyle Capital Corporation division.
Carlyle Capital says that it is currently more than USD16 milliard short of the calls - and that more will become due in the next few days.
The Carlyle Group is already setting out its position with regard to Carlyle Capital Corp (CCC) - and it's clear that it's prepared to walk away from the Amsterdam listed company if its problems cannot be negotiated away.
In a statement The Carlyle Group said that CCC is a separate legal entity and that Carlyle has not agreed to assume any of its assets. It has, the statement says, put forward USD150 million from the personal resources of the Carlyle Group partners and none of that money came from Carlyle investors or any of the other Carlyle funds.
The partners are mainly individuals but CalPers, the California State Pension Scheme owns 5% and 7.5% is owned by a private fund based in Abu Dhabi.
Carlyle Group statement:
March 11, 2008#2008-023The Carlyle Group Issues Statement on CCC
Washington, DC - Global private equity firm The Carlyle Group today issued the following statement related to Carlyle Capital Corporation (CCC).
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In recent days we have received questions about the relationship of CCC to The Carlyle Group.
CCC is a publicly traded company on the Euronext Amsterdam N.V. A majority of its voting directors are independent of The Carlyle Group. The Carlyle Group has not purchased any of the securities of CCC, although individuals at Carlyle collectively own approximately 15% of the securities of CCC. The Carlyle Group and CCC are separate legal and business entities and under a contractual arrangement, Carlyle serves as the investment advisor to CCC.
Since difficulties in the credit market began in August 2007, Carlyle has supported CCC through its liquidity problems, including the extension of a $150 million line of credit. This line of credit was provided by The Carlyle Group general partnership; none of these funds came from any of The Carlyle Group’s investors or any of our other 59 investment funds. None of The Carlyle Group’s other investment funds or portfolio companies have investments in CCC.
We believe that the challenges facing CCC will have no measurable impact on any other fund sponsored by The Carlyle Group or any of our portfolio companies.
The Carlyle Group is working tirelessly with CCC to assist it in its efforts to maximize value for all interested parties. CCC will continue to provide updates on its progress as the situation develops.
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