Copyright 2002, Roadracing World Publishing, Inc.

By David Swarts

Texas Pacific Group (TPG), a capital investment firm with $10 billion in assets, is looking to sell its 33.5% share of Ducati Motor Holding, S.p.A., the BBC reported on Monday, August 19.

TPG bought into then-cash-strapped Ducati in 1996.

As a capital investment firm, companies like TPG inject financially troubled but otherwise sound companies with working capital in hopes that they will return to profitability. Theoretically, after the troubled company rebounds, the investment company sells off its shares and makes a profit or continues to run the company and makes a profit. If the company fails to rebound, the investment firm could potentially lose money.

TPG bought then-bankrupt Continental Airlines in 1993 and made the company profitable within months, according to the Reuters Business Report, providing investors a “ten fold” return on their investments. In the following year, TPG invested successfully in bankrupt America West. According to an August 15, 2000 USA Today article, TPG recently made an offer to buy 38% of bankrupt U.S. Airways for $200 million. And in July, TPG led a $2.3 billion buyout of Burger King.

On July 16, 2002, Ducati Motor Holding S.p.A. reported record revenue gains of 6.7% for the first half of 2002 over the same period of 2001.

Ducati is traded on the New York Stock Exchange under the symbol DMH.