Carlyle's Synagro preparing for bankruptcy: sources
(Reuters) - Carlyle Group LP's (CG.O) Synagro Technologies Inc is preparing to file soon for Chapter 11 bankruptcy protection to restructure its debt, two sources with knowledge of the situation told Reuters.
Synagro is the largest recycler of organic waste in the United States and Carlyle's infrastructure fund borrowed heavily to take it private in 2007 in a $772 million deal.
That deal left Synagro vulnerable when municipalities cut spending on wastewater treatment and other environmental projects in the aftermath of the 2008 financial crisis.
The company also lost two major contracts in New York City and Detroit. Synagro's Detroit contract was mired in a bribery scandal that weighed on the public image of the Houston, Texas-based company.
Synagro and Carlyle did not immediately respond to a request for comment.
Carlyle brought in Evercore Partners earlier this year to find buyers for Synagro, sources familiar with the matter told Reuters in January. The effort to sell the company has so far proved unsuccessful, one of the sources said on Wednesday.
Moody's said the company defaulted on its debt earlier this month. It said Synagro had a $290 million first-lien term loan due in April 2014 and a $150 million second-lien term loan due in October 2014.
Synagro was founded in 1986 and employs 800 in 34 states, according to its website.
(Additional reporting by Gregory Roumeliotis in New York; Editing by Bob Burgdorfer)