Friday, February 23, 2007
Private Equity Juggernaut smashing through UK companies
Private equity: the human cost
A very good article, especially when you are half way through it and you see the figures involved. I now realise that I myself was a victim of one such buyout in 2003 by 3i, fasten your seatbelt you have been warned.
Posted by enuii @ 09:44 PM (865 views)
5 thoughts on “Private Equity Juggernaut smashing through UK companies”
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Shipbuilder says:
That bit about Debenhams is incredible. Scum.
Stew says:
Very interesting. I to was a victim of 3i in 2004, when they single handedly pulled out investment in the company I worked for (for 7 years). They destroyed a compnay full of dedicated people who would have done anything to keep it going. The rug was pulled out from underneath us, the weath of knowledge & experience within our company was extraordinary, but we were all left pennyless the day before pay day. They were only interested in figures, not dedication, spirit, ambition, creativity & a sense of comminity or the log term goals and achievements.
Jim says:
” Debenhams has become the text book case. CVC, Texas Pacific and Merrill Lynch Private Equity used £600m to buy the business in 2003.
They increased the retailer’s debt from £100m to £1.9bn and paid themselves a dividend of £1.2bn. They sold the freehold of the stores for £500m and leased them back. They then floated the business and took another £600m.
In a little over two years, they made around three and a half times their investment.
Debenhams now faces huge interest payments and rent on stores it once owned.”
How can some of this be legal?
Speculatorone says:
Stew, the same happened to me at Weetabix last year, humans don’t matter just selling off all assets and increasing margin for selling company on. There should be rules to stop these w$%^$kers from doing this to ordinary hard working people…..
paul says:
“The Financial Services Authority recently warned that the City should get ready for some “short sharp shocks”.”
Hmm. You betcha.