Willcom Bankruptcy Stings Carlyle

Source: Nikkei.com (Dow Jones)

Japanese mobile-phone company Willcom Inc. filed for bankruptcy protection Thursday, dealing a blow to its owner Carlyle Group and highlighting the challenges of private-equity investing in Japan.

In 2004, Carlyle made its largest bet in Japan when it paid about $330 million for a 60% stake in the mobile-phone unit of KDDI Corp. The deal was struck after more than two years of sensitive negotiations with a reluctant Japanese seller -- a hard-fought acquisition seen as a symbol of the difficulties U.S. investors faced buying into Japanese firms, yet also a sign of the opportunities in a newly opening Japan.

But the business, renamed Willcom, gradually lost market share in the competitive Japanese wireless market. After failing to reach agreement with creditors, Willcom filed for court protection with roughly $2.3 billion in debt. The move will wipe out the investment of Washington, D.C.-based Carlyle, according to people familiar with the situation. The bankruptcy is the biggest ever for a Japanese telecom company, according to the research firm Teikoku Data Bank.

Despite Willcom's failure, Carlyle's flagship Japanese buyout fund is on track to return two times their money to investors, said a person familiar with the matter. The Willcom investment is spread across three different Carlyle funds, limiting damage to any one portfolio.

Read more: http://www.nni.nikkei.co.jp/e/fr/tnks/Nni20100219D19JF990.htm

A company that sounds like a call girl operation, and then it going bankrupt on them....

:sarcasm:

People don't realize how HUGE HUGE and far-reaching Carlyle is.

Unnecessary :nopity: for Carlyle - they're THRIVING! Don't be fooled by this article!

on edit: The article even states that it's a "sting" ~ like a mosquito...an annoyance. Not serious like a heart attack. It's just a little *blip* on this behemoth's landscape,

is just from the purchase?

Seems like it's fine for everyone on TV to talk about homeowners taking on crippling debt loads and then defaulting - but there's very little mention of these fine "capitalists" buying companies, loading them up with unsustainable debt as well - then cashing out before the companies crash. It's hailed as modern day finance

would be great if this really affected them.

The new location for their money was not disclosed at the time, nor, I imagine, is it now.

prolly took out wa-ay too much debt - overleveraged the shit out of the deal and sucked all of the goodness out of the company and left only a husk to die.