Energy Future, creditors reach settlement over bankruptcy plan
Nov 24 Texas's biggest power company, Energy Future Holdings Corp, has reached a settlement with the last group of creditors opposed to its Chapter 11 bankruptcy plan, increasing the likelihood the plan will be confirmed.
The company said in court filings late Monday it had reached settlements with the official creditors committee of Energy Future Holdings, as well as a representative for some junior bondholders.
The plan centers around the sale of its Oncor power distribution business, the biggest power distributor in Texas, to a group led by Hunt Consolidated of Texas. That deal has been valued at $19 billion.
The committee had opposed the structure of the deal, which they said would allow Hunt to walk away if the deal failed to clear regulatory hurdles.
Under the settlement, the committee and bondholders agreed to drop their opposition to Energy Future's plan and the Hunt deal. In return, they would receive some of the interest that has accrued during the bankruptcy.
On Wednesday, Energy Future will lay out the settlements to U.S. Bankruptcy Judge Christopher Sontchi at a hearing in Wilmington, Delaware, according to court documents.
The settlement comes as Energy Future is wrapping up a weeks-long trial to confirm its plan. Closing arguments are scheduled next week, although few objections remain.
In addition to the Oncor sale, the plan also spins off Energy Future's power generation and retail utility businesses to senior creditors.
If Sontchi confirms the plan, Energy Future will remain in bankruptcy until various regulatory hurdles have been cleared. Energy Future will need approvals from the Public Utility Commission of Texas, the U.S. Nuclear Regulatory Commission and the Internal Revenue Service.
Dallas-based Energy Future entered bankruptcy last year under the weight of its $42 billion in debt and low power prices.
Energy Future was formed out of the $32 billion 2007 buyout of TXU Corp led by KKR & Co, TPG Capital Management and the private equity arm of Goldman Sachs. (Reporting by Tom Hals in Wilmington, Delaware; Editing by Andrew Hay)