KKR Private Equity Investors, L.P. (Euronext Amsterdam:KPE)
announced the consummation of its JPY 20 billion (US$167.4 million)
investment in certain convertible preferred stock of Orient
Corporation ("Orico"), one of the largest consumer credit companies in
Japan.
The convertible preferred stock is convertible into Orico common
stock starting on November 1, 2010, and KPE's investment represents
approximately 4.5% of Orico's capital stock on a fully diluted basis
based on the initial conversion price. The initial conversion price is
90% of the average market price of Orico common stock on the Tokyo
Stock Exchange during a specified period prior to Orico's announcement
of its restructuring plan in Japan on March 28, 2007 (multiplied by
two to reflect the reverse stock split by Orico scheduled for June 4,
2007). The conversion price is subject to a semi-annual downward-only
ratchet adjustment to 90% of the then market price of Orico common
stock, but not less than approximately 52.4% of the initial conversion
price.
The Orico investment was negotiated on behalf of KPE by Kohlberg
Kravis Roberts & Co. ("KKR") and was made through KKR PEI Japan
Investment I, Ltd., a wholly-owned subsidiary of KKR PEI Investments,
L.P., which is the investment partnership through which KPE makes its
investments.
In connection with the Orico investment, KPE has identified a new
class of private equity investments, referred to as "negotiated equity
investments." Negotiated equity investments are investments which are
significantly negotiated by KKR and involve the issuance of equity or
equity-linked securities to or on behalf of KPE.
The convertible preferred stock investment in Orico and the
convertible notes investment in Sun Microsystems constitute KPE's only
negotiated equity investments to date. KPE invests at least 75% of its
adjusted assets in private equity investments identified by KKR, which
include negotiated equity investments.
These negotiated equity investments will be classified as Class B
investments in the same manner as co-investments in portfolio
companies of KKR private equity funds. Class B investments are subject
to a carried interest of 20% of the realized returns (net of capital
contributions for such Class B investment and realized losses in
respect of all Class B investments).
The identification of negotiated equity investments, as well as
the inclusion of negotiated equity investments as private equity
investments and their classification as Class B investments, was
approved unanimously by the independent directors of the board of
directors of KPE's general partner, KKR Guernsey GP Limited.
About KPE
KKR Private Equity Investors, L.P. (KPE) is a Guernsey limited
partnership that seeks to create long-term value by participating in
private equity and opportunistic investments identified by Kohlberg
Kravis Roberts & Co. (KKR). Formed in April 2006, KPE enables certain
public market investors to invest in KKR-identified investments. KPE
will invest at least 75% of its assets in KKR's private equity
investments, while up to 25% of its assets may be invested
opportunistically in other investments identified by KKR. KPE makes
its investments through another Guernsey limited partnership, KKR PEI
Investments, L.P., as its sole limited partner.
The common units and related restricted depositary units of KPE
are subject to a number of ownership and transfer restrictions.
Information concerning these ownership and transfer restrictions is
included in the Investor Relations section of KPE's website at
www.kkrpei.com.
Forward-Looking Statements
This release may contain certain forward-looking statements with
respect to the financial condition, results of operations, liquidity,
investments, business, net asset value, and prospects of KPE. By their
nature, forward-looking statements involve risk and uncertainty,
because they relate to events and depend on circumstances that will
occur in the future, and there are many factors that could cause
actual results and developments to differ materially from those
expressed or implied by these forward-looking statements. KPE does not
undertake to update any of these forward-looking statements.
