Carlyle is reported to have asked Evercore Partners to explore sale options for debt-laden Synagro Technologies, the largest recycler of organic waste in the US and the global buyout firm’s first infrastructure fund investment.
Reuters reported the news on Tuesday, citing two unnamed people familiar with the matter.
Launched in 2006, Carlyle’s $1.1bn infrastructure fund took Synagro private in 2007 in a $772m deal that left the company saddled with a significant amount of debt.
Reuters said the extent of the borrowing left Synagro financially vulnerable when municipalities cut spending on wastewater treatment and other environmental projects following the 2008 financial crisis.
The business, which ended up losing two major contracts in New York City and Detroit, has more than $500m of debt and a $100m credit facility due in April, Moody’s Investors Service said in August.
The company sealed a waiver from its lenders for a breach of debt covenants in December, the report said.
If Evercore is unsuccessful in its attempt to find a buyer for Synagro, the company could be taken over by its lenders, the report added.
Carlyle’s infrastructure fund was valued at its investment cost as of the end of September, representing a negative internal rate of return of seven per cent, the report added.
Copyright © 2013 AltAssets