(Bloomberg) -- Carlyle Group Inc. sold a troubled loan it provided to iRobot Corp. less than three years ago as the maker of Roomba vacuum cleaners is trying to stave off a potential bankruptcy filing.
The investment firm sold about $191 million of outstanding debt in principal and interest to Santrum, a subsidiary of Shenzhen PICEA Robotics Co., according to a Monday filing. The company didn’t disclose whether the debt was sold at a discount. PICEA is a large manufacturer for iRobot which was owed about $161 million, with some already past due, and is in discussions with the company, iRobot said in the filing.
“If we are unable to find sources of capital in the near term, or resolve our significant outstanding payables to Picea, we may be forced to significantly curtail or cease operations and would likely seek bankruptcy protection,” iRobot said.
Carlyle provided the $200 million senior secured loan in 2023, betting on the prospects of the consumer robotics space, and that the company would be acquired by Amazon.com. The deal fell apart last year after European Union regulators had threatened to block the deal and Amazon decided not to offer remedies to concerns flagged by regulators. Carlyle was repaid part of the loan as a result. iRobot received $40 million as a termination payment, which should have gone mostly to repay Carlyle. The company agreed with Carlyle to amend the loan and repay $4 million, and the rest has been used to fund ongoing business operations, iRobot said on Monday.
The company reported a 33% year-over-year revenue decline in the US and a $17.7 million operating loss for the quarter ended Sept. 27. Chief Executive Officer Gary Cohen cited “continuing market headwinds, ongoing production delays, and unforeseen shipping disruptions.”
In March, the company reported that for its 2024 earnings, the auditor had expressed substantial doubt about its ability to continue as a going concern. Since then, iRobot has come to agreements with Carlyle to avoid breaching the going concern covenant on its loan, with the most recent one expiring on Jan. 15. If the waiver isn’t renewed, Santrum would be able to exercise all applicable remedies under the loan’s credit agreement.
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