Texas power company Energy Future proposes prepackaged bankruptcy

Reuters Business News
Posted: Apr 15, 2013 6:22 PM

(Reuters) - Texas power company Energy Future Holdings has proposed a prepackaged bankruptcy that would restructure $32 billion of debt, but no deal has been reached, the company said on Monday.

Energy Future <TXEFHE.UL>, taken private in 2007 in the largest-ever leveraged buyout, said in a U.S. Securities & Exchange Commission filing that it has proposed the restructuring deal to creditors that would exchange secured creditors' claims for a combination of equity and new debt.

"The principals of the companies and the creditors are currently not engaged in ongoing negotiations," Energy Future said.

It noted, however, that creditors have conveyed they would consider the restructuring if it increased distributions and better compensated them for the risk of exchanging their claims for equity.

Energy Future, formerly TXU Corp, is Texas' largest power generator, and is trying to restructure more than $30 billion in debt after a buyout viewed as a spectacular failure.

Its two unregulated units include its retail business TXU Energy and its merchant power unit Luminant, which owns more than 15,000 megawatts of nuclear, coal and gas-fired power plants. Its power delivery business, Oncor, is regulated.

(Reporting by Nick Brown in New York; Editing by Lisa Shumaker)