FOR YOUR INFO CARLYLE CAPITAL CORP. IS THE MOST INFLUENTIAL AND POLITICIZED OF THE WORLD. AMONG ITS PARTNERS YOU CAN FIND FROM SAUDI FAMILY TO AGNELLI'S IN ITALY AND IN USA ..... YOU GOT IT RIGHT?
2 WEEKS AGO RECEIVED A MARGIN CALL.
AND THAN....:
Carlyle Capital to be wound up
By Marin Arnold, Private Equity Correspondent
Published: March 17 2008 10:19 | Last updated: March 17 2008 10:19
Carlyle Capital Corporation is to be wound up after the $22bn Amsterdam-listed mortgage fund said its shareholders had approved an application for a court appointed liquidator to sell its remaining assets.
The move sounds the death knell for an abortive attempt by the Carlyle Group, one of the world's biggest private equity groups, to tap public markets for an ill-timed and highly leveraged venture into mortgage-backed securities.
"The company will now move forward with the winding up and liquidation application," CCC said in a statement. "During a compulsory winding up, all remaining CCC assets will be liquidated by a court appointed liquidator in a timely and orderly manner."
The liquidation will take place in Guernsey, where the fund is registered. CCC said it had received default notices from its remaining two lenders and added that its liabilities now exceeded its assets.
Its board recommended liquidation "following extensive analysis of the company's prospects and careful consideration of other options for continuing the business".
"The company will work with the court appointed liquidator to ensure an orderly realization of assets and their subsequent distribution," it said.
CCC, 15 per cent owned by executives of the Carlyle Group, said last week its banks were likely to take possession of its remaining assets and liquidate them after it ran out of cash to meet margin calls – demands for more collateral – that exceeded $400m.
The fund's implosion represents one of the most dramatic casualties in the sector as lenders pull back from risk. One of its biggest lenders was Bear Stearns, the sricken investment bank bailed out by the Federal Reserve last week. Other big lenders were Citigroup, Bank of America, JP Morgan and UBS.
The fund, which had $31 of debt for every $1 of its own, had hoped to use its massive borrowings to generate higher returns from investments in highly rated mortgage securities.
Its strategy was undone by the turmoil in the mortgage markets, dealing a heavy blow to the reputation of Carlyle, one of the world's biggest private equity groups, and raising questions about whether it became too diversified.
Investors in CCC – many who also back Carlyle's buy-out funds – are asking why it was so late in cutting back on its use of borrowed money.
Shares in CCC, which floated at $19 in July, have fallen to below $1 in recent weeks. Though they rallied slightly on Friday after David Rubenstein, co-founder of the Carlyle Group, pledged to compensate investors.
Copyright The Financial Times Limited 2008