Thursday, August 6, 2015

Carlyle Group's Zodiac Bankruptcy While Awash in Dry Powder

The Carlyle Group has a record amount of dry powder, uninvested capital waiting to be deployed.  Business Insider reported:

Carlyle Group is sitting on a mountain of cash. It said it was holding $62.8 billion in "dry powder" — money it has raised but hasn't yet spent.
WSJ reported on July 31, 2014:

Zodiac Pool Solutions SAS, the Paris-based swimming pool and spa manufacturer, filed Thursday for bankruptcy protection in the U.S. as part of its debt-restructuring effort now under way in the U.K.

Formerly known as Zodiac Marine & Pool, Zodiac Pool filed for protection under Chapter 15—the section of the Bankruptcy Code that deals with international insolvencies—in U.S. Bankruptcy Court in Wilmington, Del.

In 2007, Washington-based private-equity firm Carlyle Group LP bought Zodiac and then merged its WaterPik business into the company. Carlyle later split off Zodiac's aerospace division form the pool maker.

The company, which has more than $1.3 billion in debt, ran into financial trouble in 2008 and has been closing facilities and selling assets, including it WaterPik and boat businesses, to stay afloat. But those efforts haven't been enough to refinance a big chunk of debt coming due in the next 14 months.

In 2014 Carlyle wouldn't put a penny of its $25 billion in PEU dry powder to meeting its financial commitments to Zodiac Pool's creditors.  Contrast that with the government and courts' treatment of citizens with student loan debt.

Update 8-9-15:   A hospice patient was arrested for being delinquent on his court costs.  Hospice patients have a prognosis of six months or less.  In order to get this gentleman's $350 in late court fees, authorities had to pay two days of hospitalization and the salaries of two officers to stand guard.  Rich people can welsh on their debts.  Ask Republican Presidential hopeful Donald Trump, who used bankruptcy more than once to improve his companies' profit position.   Poor people have to pay, no matter what.