November 30, 2021

Cayman Islands: Carlyle sues China ATM firm seeking $369 million over missed IPO

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screen-shot-2016-09-22-at-8-12-14-amBy Benjamin Robertson, Cathy Chan From Bloomberg

Winding-up petition filed in Caymans by two Carlyle funds
Carlyle Asia Growth Partners IV announced investment in 2010

Carlyle Group LP funds are taking legal action against Chinese automated teller machine company ATMU Inc., claiming to be owed $368.9 million after ATMU allegedly missed a four-year deadline for an initial public offering.
The Hong Kong-based Carlyle Asia Growth Partners IV and CAGP IV Co-investment filed a winding-up petition against ATMU in the Grand Court of the Cayman Islands this month, seeking to recoup their investments. The Chinese company was incorporated in the Caymans in 2006, according to the legal document.
The legal filing comes six years after Carlyle Asia Growth Partners IV announced that it was investing in ATMU, which private equity firm Carlyle described that year as China’s “largest independent automated teller machine operator and service provider.”
The funds have the right to redeem their shares and exit because no IPO took place within four years of their May 2010 investments, the winding-up petition alleges. ATMU hasn’t responded to redemption notices and letters delivered to its registered office in the Caymans, the petitioners allege.
In a statement to Bloomberg, ATMU said it was trying to find ways for financial investors to exit, without saying why it hadn’t paid them out.
Brian Zhou, a Beijing-based spokesman for Carlyle, declined to comment.
Exit Channels
“Although ATMU did not conduct an IPO due to the fluctuating stock market in recent years, the company is helping financial investors to seek proper exit channels, including but not limited to capital market activities,” Peng Yafeng, an ATMU administration office director, said in an e-mail. “ATMU is confident that it can redeem the shares of the financial investors.”
Peng said that the company’s operations were “good” and it was “capturing new market opportunities.”
In 2010, Carlyle said ATMU had a 15 percent share of China’s ATM market and “an exclusive cooperation agreement” with Postal Savings Bank of China Co., the giant state lender that is now on the verge of listing on Hong Kong’s stock exchange.
A Postal Savings Bank press officer in Beijing said Wednesday that ATMU had supplied the bank with some ATM facilities and maintenance services.
The winding-up petition asks for PwC staff in the Caymans, China and Hong Kong to be appointed as liquidators and says a court hearing will take place in the Caymans on Nov. 10. A PwC staff member in Hong Kong declined to comment.

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