CARLYLE GROUP Suffers Loss -- But RELAX -- "Wimpy" Bush's Private Equity Firm Still Has $40 Billion Socked Away!
Ol' Grand Bag
By Thomas Heath
Washington Post Staff Writer
Tuesday, February 3, 2009; D03
A German auto parts manufacturer owned by Carlyle Group declared
bankruptcy yesterday, causing the District-based private-equity giant
to lose its $180 million investment, a Carlyle spokesman said
yesterday.
The insolvency of Edscha, which manufactures door hinges, convertible
roofs and driver controls for major carmakers, follows a 50 percent
drop in some of the company's businesses during the fourth quarter of
2008.
"Edscha succumbed to the double-barreled effect of an ailing worldwide
economy and a suffering automobile industry," Carlyle spokesman Chris
Ullman said.
Carlyle bought Edscha in January 2003 and grew sales from $1 billion
in 2005 to almost $1.4 billion in the fiscal year that ended June
2008.
With a collapse in the worldwide automobile market last year, business
at Edscha plummeted. Carlyle injected $25 million in December to help
see Edscha through the economic downturn, the company said.
Edscha, which was established in 1870, employs about 6,000 people at
29 factories worldwide. The company made parts for several BMW models
and Rolls-Royce Phantom Drophead Coupé models, according to Automotive
News.
Carlyle has suffered in the current economic malaise along with
everyone else.
The company announced in December that it would lay off about 100
members of its 1,000-employee staff, which stretches across 33 offices
in 21 countries.
In November, Carlyle closed its Warsaw office and ended financial
operations in some Eastern European and Asian markets, which resulted
in 18 layoffs.
In December, one of its investments, Hawaiian Telcom Communications,
filed for bankruptcy protection.
Last March, Carlyle wrote off a $700 million investment in its Carlyle
Capital affiliate.
Despite the slowdown, Carlyle has pulled off a few deals this year. It
bought the government operations unit of Booz Allen Hamilton for $2.54
billion last summer and recently sold automotive company AxleTech
International to General Dynamics for what Carlyle called "an
excellent gain."
Edscha is part of a fund called Carlyle Europe Partners I that to date
has returned twice its initial investment, Ullman said.
Overall, Ullman said, "our global portfolio of 200 companies is doing
well, and we have $40 billion in capital to invest."
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/02/AR2009020203027.html