Friday, July 29, 2011

Carlyle's Edscha Implosion

The case is Edscha North America Inc., 09-39055, U.S. Bankruptcy Court, Northern District of Illinois (Chicago).   Bloomberg reported:

The Chapter 11 filing came more than eight months after the parent company, Edscha AG, began its own insolvency proceedings in Germany. The companies are ultimately owned by Carlyle Group. The U.S. company listed assets of $6.4 million against debt totaling $672 million, including $629 million in secured claims.  Secured creditors were already paid in part from sales of assets.
The U.S. division of Edscha will make good on less than 1% of Bloomberg's cited debt.

The Pension Benefit Guaranty Corp. will receive $694,000 cash on account of its $11.8 million claim.

The Carlyle affiliate paid 5.8% of the PBGC claim.  Note that Carlyle heavily promotes its investment offerings to pension funds.

Edscha won't make Carlyle's pre-IPO storytelling.  Neither will nine other stories.  It's all part of Carlyle's openness and demystification.

Update 7-31-11:  Capital Buzz reported "it’s shaping up to be the most lucrative in Carlyle’s 24-year history." The "Great Cash In" will climax with Carlyle's IPO.