Italy Firm Got Carlyle Cash and Allegedly Paid for Yacht, Winery

It seemed like a low-risk bet when in 2020 Carlyle Group Inc. agreed to provide around €200 million ($210 million) in private bonds to Pro-Gest SpA, a family-owned paper and packaging company based near Venice.

The papermaker’s finances came under pressure in 2019 as production at one of its main plants was temporarily suspended by local authorities. The pandemic helped boost demand for paper packaging and Carlyle agreed to step in to refinance a portion of Pro-Gest’s debt when the company offered some of its best assets as collateral. The deal put the American private capital giant first in ...