Carlyle Capital Corp. Ltd. (CCC.AE), a listed investment company managed by a unit of private equity firm the Carlyle Group, said it "can and will do better" after losing 30% of net asset value between its July listing and Dec. 31.One week later Carlyle declared their intention to put CCC into bankruptcy. A March 15, 2008 press release stated:
Net asset value per share declined to $13.11 at Dec. 31 from $18.65 shortly before the listing, while the stock price has dropped 34% from its $19 offer price to $12.50 Friday.Chief Executive John Stomber said in the annual report the company did not fully anticipate the repricing of risk that took place in the second half of 2007, "but we make no excuses for our performance."He said the company has taken decisive action to reduce risk, enhance liquidity and preserve the long-term value of shareholder capital.
As expected, the Company received default notices from its remaining two lenders and it believes that its lenders have now taken possession of substantially all of its U.S. government agency AAA-rated residential mortgage-backed securities (RMBS). As a result, the Company believes its liabilities exceed its assets.What a difference a week can make in the PEU world. As for Carlyle's sales claims public investors may wish to recall The Carlyle Group's admission of puffery in regard to another investment that imploded. This news won't be found on Bloomberg. They need to keep their PEU access.
The recommendation was made by the Board 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.
Update 1-12-14: InvestmentNews offered an editorial on new PEUtual funds.