LONDON KKR Private Equity Investors LP, the company set up to make equity investments identified by Kohlberg Kravis Roberts & Co., has announced write downs on almost all its investments and wiped 80 percent off the value of its holding in semiconductor company NXP BV (Eindhoven, The Netherlands). KKR's holding in NXP now stands on 10 cents on the dollar purchase price.
Last March, KKR Private Equity Investors LP said it had to write down the value of its stake in NXP by 25 percent.
KKR teamed up with Silver Lake Partners, Bain Capital, Apax Partners Worldwide LLP and AlpInvest Partners NV to buy an 80 percent stake in NXP in August 2006 for 6.4 billion euros (about $8 billion). Royal Philips Electronics NV retained a 20 percent share in the chip maker.
KKRPEI announced a decrease of $111.3 million in the value of its investment in NXP, which was marked on a U.S. dollar basis from 0.5 times cost as of Sept. 30, 2008 to 0.1 times as of Dec. 31, 2008.
Overall KKR's net asset value (NAV) was quoted as $2,168.7 million as of Dec. 1 down by $1,178.1 million or 35.2 percent.
“The steep declines in global capital markets during the fourth quarter had a sizable negative impact on KPE’s quarterly NAV. We believe that the valuations of KPE’s underlying private equity investments are more reflective of broader global macroeconomic conditions and mark-to-market considerations than they are of the fundamentals of KPE. KKR has full confidence that KPE’s portfolio will ultimately produce realizations which will accrue to the benefit of KPE unitholders after the economy has stabilized," said Henry Kravis, co-founder of KKR and Co-chairman of KPE's managing partners' board of directors.
George Roberts, co-founder of KKR and co-chairman of KPE's managing partner’s
board of directors, commented, "Private equity is inherently a long-term asset class. Our success is never predicated on short-term gains or single-quarter valuations, but on working to improve the operations of our portfolio companies over years and through economic cycles. We believe that we have positioned the companies in KPE's portfolio well for an extended period of slower global growth by managing costs, anticipating refinancing issues and de-leveraging. We maintain our adherence to our core values of patience, discipline, multifaceted stakeholder engagement and strong corporate governance, as these are the best ways we know to grow and improve businesses in the long run."
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