Energy Future Holdings scuttles restructuring plan, still wants to spin off Luminant

By Kathryn Jones

Editor

Photo courtesy Nuclear Regulatory Commission

Photo courtesy Nuclear Regulatory Commission

Texas power giant Energy Future Holdings Corp., the parent company of Luminant and the Comanche Peak Nuclear Power Plant, said Thursday it was terminating its financial restructuring plan after being unable to reach a settlement with creditors.

EFH made the disclosure in a filing with the U.S. Securities and Exchange Commission obtained by the Glen Rose Current. Read it here: http://www.sec.gov/Archives/edgar/data/1023291/000119312514277803/d762897d8k.htm

The agreement officially will be terminated on July 31.

EFH filed a pre-arranged Chapter 11 bankruptcy restructuring plan in April.

About 35 percent of the holders of the $760 million of second-lien notes agreed to the settlement, EFH said in a news release earlier this week. But various creditor groups complained about being “unfairly compensated” for their bonds and notes and held out for more.

EFH could not reach a settlement with so-called “second lien” debt holders before the tender offer expired.

The Dallas-based company said it will continue to focus on putting together an “efficient and effective” reorganization plan.

In the filing, EFH said it planned to auction its stake in Oncor Electric Delivery Co., its power transmission business, and conduct a bankruptcy court-supervised bidding process.

Hunt Consolidated of Dallas and NextEra Energy of Florida have both expressed interest in acquiring Oncor. Hunt Consolidated is owned by the billionaire Hunt family.

EFH said in the filing it intended to pursue a tax-free spinoff of Luminant, its power generating arm, and TXU Energy, its retail electricity business.

The Associated Press quoted Moody’s Investor Services analyst Jairo Chung as saying Oncor’s prospects for growth are better than the industry average because of its coverage area in Northwest Texas, which is projected to see significant population growth. The auction proceeds would be allocated among Energy Future’s creditors, Chung said in the AP’s report.

EFH filed for Chapter 11 because it could not longer operate under a staggering $40 billion in debt stemming from the largest-ever leveraged buyout that created the company and from falling natural gas prices.

Earlier this week, Hunt Consolidated headed by Ray L. Hunt further positioned itself for a possible acquisition by hiring David Campbell, Luminant’s former chief executive, to take over as president of Hunt Utility Services.

Campbell resigned in 2012 to join Bluescape Resources, an independent resource company based in Dallas, as president and chief operating officer.

Hunter L. Hunt, president and CEO of Hunt Consolidated Energy, said in a prepared statement Monday that Campbell brings a” wealth of experience to our efforts as we continue to expand our presence in the electric utility and infrastructure space.”

 

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