The private equity-backed energy giant filed for bankruptcy two years
ago and hopes to resolve its new Chapter 11 case by August.
by Laura Berman
More than two years after first filing for bankruptcy, Energy Future Holdings Corp. filed a new Chapter 11 plan on Sunday after plans to sell a subsidiary fell through.
In the Sunday filing with the U.S. Bankruptcy Court for the District of Delaware in Wilmington, the Dallas electricity producer filed a disclosure statement for the new joint reorganization plan.
As in the original plan, EFH sought permission to sell its power plants and retail electricity business to senior creditors.
The new plan, unlike the previous one, would allow creditors to take control of those assets before EFH concludes a sale of its 80% stake in Oncor Electric Delivery Co. LLC. A sale of the asset, which is not bankrupt, was canceled last Thursday.
The Oncor divestiture, a key component of EFH’s reorganization plan, was approved by the Public Utility Commission of Texas on March 24. A group of investors led by the billionaire Hunt family’s Hunt Consolidated Inc. had agreed to pay $18 billion for the subsidiary.
EFH said in a court hearing on Thursday that investors supporting the Oncor sale had pulled out, forcing EFH to come up with an alternative reorganization plan.
Other members of the Oncor consortium included Anchorage Capital Group LLC, Arrowgrass Capital Partners LLP, Avenue Capital Group LLC, BlackRock Inc. (BLK), Centerbridge Partners LP, GSO Capital Partners LP and the Teacher Retirement System of Texas.
Under the new plan, Oncor could go to the Hunt consortium, to second-lien noteholders or to another bidder, such as NextEra Energy Inc. (NEE). The Florida power company attempted to buy Oncor in November.
Oncor is controlled by EFH’s affiliate, Energy Future Intermediate Holding Co. LLC.
Besides the Oncor sale, the original plan called for EFH to implement a tax-free spinoff of its Texas Competitive Electric Holdings Co. LLC unit, which owns utility TXU Energy and Luminant, an electricity generation, mining and wholesale energy trading and power marketing company. The intended buyers were EFH’s first-lien creditors.
EFH is seeking a quick Chapter 11 exit, requesting an Aug. 1 confirmation hearing date from Judge Christopher Sontchi.
The private equity-backed company originally filed for Chapter 11 protection on April 29, 2014, to implement a restructuring which was later scrapped. At the time, EFH’s total debt was just under $42 billion.
Sontchi confirmed EFH’s sixth amended reorganization plan on Dec. 3. He had previously approved the Oncor sale on Sept. 18, after which the debtor and Hunt on Sept. 29 filed a joint application with the Public Utility Commission of Texas to approve the sale.
EHF, formerly known as TXU Corp., was formed after a consortium of private equity firms, including Kohlberg Kravis Roberts & Co. LP (KKR), TPG Capital and Goldman, Sachs & Co., acquired the company for about $32 billion in equity on Oct. 10, 2007, assuming $13 billion in debt.
Debtor counsel Edward Sassower of Kirkland & Ellis LLP and Mark D. Collins of Richards, Layton & Finger PA couldn’t be reached for comment Sunday. James H.M. Sprayregen, Chad J. Husnick, Steven N. Serajeddini and Brian E. Schartz of Kirkland are also debtor counsel. Kirkland’s Amber Meek and Andrew Calder lead the M&A team advising EFH.
Daniel J. DeFranceschi and Jason M. Madron of Richards, Layton & Finger PA are local debtor counsel.
An Evercore Partners Inc. team led by William Hiltz, David Ying, Stephen Goldstein, Brendan Panda and Sesh Raghavan is providing financial advice.
Alvarez & Marsal North America LLC is EFH’s restructuring adviser.