NEW YORK/AMSTERDAM Investment company Carlyle Capital Corp CARC.AS said on Sunday its shareholders have voted unanimously in favor of a compulsory winding up.
The company said it will now start winding up and sell its remaining assets under Guernsey law, and NYSE Euronext said that the fund's shares would trade under a separate category as it goes through the process.
Carlyle Capital Corp (CCC) is a separate legal and business entity from U.S. private equity firm Carlyle Group, and the group said last week that the listed fund would not have a measurable impact on Carlyle's other funds, investments and portfolio companies. The fund is 15 percent-owned by Carlyle Group executives.
Caryle Capital's share price plunged 58 percent on Monday in light trade to $0.30. The initial public offer price 10 months ago was $20.
Carlyle Capital, an affiliate of U.S.-based buyout firm Carlyle Group CYL.UL, said it has received default notices from its last two remaining lenders and believes that its lenders have now taken possession of substantially all of its U.S. government agency AAA-rated residential mortgage-backed securities (RMBS).
It said it recommended to shareholders to vote in favor of the winding-up after extensive analysis of its prospects.
Carlyle's administrator and lawyers in Guernsey, the British offshore dependency where it is based, did not return calls seeking comment.
Carlyle Capital was hit severely by the impact of the credit crisis on leveraged investors and comes as JPMorgan Chase (JPM.N) moves to buy stricken rival Bear Stearns BSC.N for a rock-bottom price while the U.S. Federal Reserve set an emergency interest rate cut and opened direct lending to Wall Street. <ID:nN16500718>
The crisis was triggered last year when risky mortgages made to U.S. borrowers went sour putting pressure on lenders to tighten credit and making it difficult to value collateralized debt, mortgage portfolios and other fixed-income securities.
Amsterdam-listed Carlyle Capital said on Thursday it has defaulted on $16.6 billion of debt and was unable to reach a deal with lenders.
It said on Wednesday that talks with lenders deteriorated after a decline in the value of its mortgage investments, which it said would result in margin calls of $97.5 million on top of the $400 million it was already facing.
Carlyle Capital's counterparties for its repurchasing agreements at the end of 2007 were Bank of America, Bear Stearns, BNP Paribas, Calyon, Citigroup, Credit Suisse, Deutsche Bank, ING, JP Morgan, Lehman Brothers, Merrill Lynch and UBS, according to its latest -- and only -- annual report.
(Reporting by Yinka Adegoke in New York and Reed Stevenson in Amsterdam; Editing by Jan Dahinten and Greg Mahlich)