Energy Future files for bankruptcy, company splitting up
Source: Dallas Morning News
Energy Future Holdings filed for Chapter 11 bankruptcy protection Tuesday morning after reaching a debt restructuring deal with creditors to would break up the company and eliminate more than half its $40 billion in debt.
The filing in U.S. Bankruptcy Court in Wilmington, Del. comes seven years after private equity firms KKR & Co., TPG and Goldman Sachs Capital Partners bought out the shareholders of the former TXU Corp. for $45 billion. The company struggled under low power prices and billions of dollars in annual interest payments, producing massive losses few would have predicted at the time of the deal, the largest leveraged buyout in U.S. history.
Under the terms of the restructuring agreement reached Monday, the Dallas power giant’s generation and retail arm Texas Competitive Energy Holdings would break off from the parent company EFH. First-lien lenders with claims on $23 billion in debt would take over TCEH, which includes Luminant and TXU Energy, according to an EFH news release.
Creditors of the company’s regulated transmission arm, which owns Oncor, would receive equity in the reorganized EFH in exchange for giving up $2.5 in debt claims. Unsecured creditors would contribute up to $1.9 billion in cash into the new company. Creditors of the parent company EFH would give up $600 million in debt claims.
Read more: http://bizbeatblog.dallasnews.com/2014/04/energy-future-files-for-bankruptcy-company-splitting-up.html/
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