In a significant financial move, global investment giant Carlyle Group Inc. has offloaded a major troubled loan it provided to iRobot Corp., the company behind the popular Roomba vacuum cleaners. This sale comes as iRobot battles severe financial headwinds and openly warns of a potential bankruptcy filing if it cannot secure fresh capital soon.
The Debt Sale and the New Creditor
According to a regulatory filing made on Monday, Carlyle sold approximately $191 million of outstanding debt, including both principal and interest, to a company named Santrum. Santrum is a subsidiary of Shenzhen PICEA Robotics Co., a major manufacturing partner for iRobot based in China. The filing did not reveal whether the debt was sold at a discounted price.
This transaction places iRobot's key supplier directly in the role of a primary creditor. iRobot confirmed in the same filing that it already owes PICEA around $161 million, with some portions of this amount already past their due date. The company is currently in active discussions with PICEA regarding these payables.
A Desperate Financial Situation
iRobot's statement in the filing painted a stark picture of its financial health. The company explicitly stated, "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."
The roots of this crisis trace back to a $200 million senior secured loan provided by Carlyle in 2023. Carlyle's bet was twofold: on the growth of the consumer robotics sector and on iRobot's anticipated acquisition by e-commerce behemoth Amazon.com. That deal, however, collapsed in 2024 after European Union regulators opposed it and Amazon chose not to propose remedies.
The failed acquisition triggered a chain reaction. iRobot received a $40 million termination fee from Amazon, most of which was intended to repay Carlyle. The two parties amended the loan agreement, with iRobot repaying $4 million and using the remainder to fund its ongoing business operations.
Mounting Losses and a Critical Deadline
iRobot's operational struggles are severe. For the quarter ending September 27, the company reported a staggering 33% year-over-year decline in US revenue and an operating loss of $17.7 million. CEO Gary Cohen blamed continuing market headwinds, production delays, and unexpected shipping disruptions.
The company's auditor had already raised a red flag in March 2024, expressing substantial doubt about iRobot's ability to continue as a going concern. To avoid breaching loan covenants, iRobot has been securing repeated waivers from Carlyle. The most recent waiver is set to expire on January 15.
With the debt now owned by Santrum, the dynamics have shifted. If a new waiver is not agreed upon by the January deadline, Santrum would gain the right to exercise all remedies available under the loan's credit agreement, potentially accelerating the crisis for the iconic robotics firm.
