TPG Capital facing almost $2.9 billion in losses on $4.7 billion in buyouts

TPG Capital, the private-equity firm that co-owns Harrah’s Entertainment, is facing almost $2.9 billion in losses on $4.7 billion in buyouts.

The Harrah’s investment was written down to the tune of about $640 million.

TPG, a $14 billion investment fund established in 2006, bought Harrah’s in partnership with Apollo Management for $30.7 billion in January 2008. They paid $90 a share and assumed the debt. When all was said and done, Harrah’s debt almost doubled to $23.9 billion, of which about $4 billion has successfully been deferred in various maneuverings engineered in the wake of the financial crisis and subsequent recession.

TPG and Apollo are trading $408 million in Harrah’s bonds for equity representing 5.7 percent of the company, according to a report in The Las Vegas Review-Journal. The swap was announced June 3, the same day hedge fund Paulson & Co. agreed to exchange $710 million of Harrah's paper for a 9.9 percent stake in the company.

The other losing acquisitions TPG reported were: Energy Future Holdings, Freescale Semiconductor and Univision Communications.