Reuters reported:
The collapse of iRobot's (IRBT.O) $1.4 billion sale to Amazon (AMZN.O) will test the cash-strapped robot vacuum cleaner maker's ability to repay a $200 million loan it took from private equity firm Carlyle Group (CG.O) last year.
The loan charges iRobot 14.9% interest and includes numerous covenants favorable to Carlyle.
Carlyle negotiated a minimum guaranteed return, so that even if iRobot prepays the loan, the private equity firm will have made 1.4 to 1.7 times the loan's principal.The remedy should iRobot flounder and default on the loan:
....declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable.What happens if iROBOT can't get the cash to pay Carlyle back? Carlyle would have a new affiliate.
The Carlyle Group took over Brintons and Mrs. Fields via forced restructurings. Might it hoover up iROBOT in similar fashion?