Chillin' out till it needs to be funded
Private equity firm Carlyle Group CYL.UL is valuing an investment it made in chip maker Freescale Semiconductor FSLSM.UL at 85 percent below its cost, a document obtained by Reuters shows.
Formerly Motorola’s semiconductor unit, Freescale was bought by Carlyle, Blackstone Group (BX.N), Permira Funds PERM.UL and Texas Pacific Group TPG.UL in 2006 in a $17.6 billion deal.
The chip maker is struggling with a high debt load and declining sales, and in February said it was seeking up to $1 billion in new loans from existing lenders. On March 25, it said it received commitments of $956.8 million.
Carlyle Partners IV, a $7.9 billion fund raised in 2005, marked its Freescale investment as having fair value of $113 million at the end of 2008, according to part of a document Carlyle sent to its investors and obtained by Reuters.
That compares with a cost of $754 million at the time of the investment, according to the document.
Carlyle also invested in Freescale in three of its other funds — Carlyle Europe Partners II, Carlyle Japan Partners and Carlyle Asia Partners II, according to its website.
Carlyle declined comment on the document.
Private equity firms are obliged for the first time this year to value their companies as if they were to sell them today.
zyakaira notes: This news item also heralds the entry of a new blogger to our portals at http://advantages.us who was incidentally at Freescale this year.