Report: Terra Firma Buys Out Cash-Strapped LPs

(Reuters) – Guy Hands has bought three cash-strapped investors out of their holdings in his Terra Firma private equity fund at a heavily discounted price, the Financial Times reported on it website late on Sunday.

The price underlines concerns about Terra Firma’s indebted investments, the paper said.

With the move, Terra Firma’s management company, tightly controlled by Hands, has taken over the three investors’ 25 million euros ($32.1 million) in his latest buy-out fund, the paper said.

Terra Firma, which was set up by UK private equity financier Guy Hands, could not be immediately reached for comment by Reuters.

The price of the purchases was thought to be close to zero, underlining how desperate the investors were to escape from their obligation to meet an additional 25 million euros of commitments not yet called in, according to the paper.

Hands, who is already one of the four biggest investors in his own fund, will now be personally liable along with other top partners for the remaining 25 million euros of undrawn capital calls, the paper said. ($1=.7797 EURO)

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Anshuman Daga)