Credit Worthy?

Would you invest in a company that had debts of nearly £15 million and had no assets and no visible means of income? No, of course you wouldn't. Nobody would.

However, CEREP UK Investment D GP Ltd, a company that owns (through its shareholdings) Freeport and also owes it almost £15 million in an ongoing loan - though it has no assets or means of income to back up this loan - is in a similar position.. Some people might question why this company should be allowed to exist.

In July this year there was an investigation by the Registrar of companies which asked this very same question - should it be allowed to continue? Though it finally conceded that there was sufficient cause not to have the company struck off the register. However, I wonder if The Carlyle Group (which essentially owns both companies) might decide to pull the plug anyway. CEREP UK Investment D GP Ltd has a loan to Freeport, which is in itself overdrawn (bankrupt) to the tune of £3.8 million - and is making losses via its profit and loss account; latest published accounts show a loss of approximately £68,000.

Does this make any economic sense to anyone?