A trio of the world’s foremost asset managers have taken a bath on their ill-fated buyout of Toys R Us, which filed for bankruptcy protection Tuesday.
KKR, Bain Capital, and Vornado Realty Trust acquired the toy retailer in a $7.5 billion leveraged buyout in 2005 and now stand to see their investment wiped out as the beleaguered retailer enters Chapter 11 with $5 billion in outstanding debt, according to Bloomberg’s David Carey.
The firms plugged $1.3 billion of equity into their purchase of Toys R Us over a decade ago and financed the remaining $6.2 billion with debt, including senior loans that they have a stake in.
The asset managers have recouped about $470 million in interest payments and management fees over the years, according to the report.
Publicly traded KKR and Vornado had previously written their investments in Toys R Us down to nothing.