Texas power company Energy Future proposes prepackaged bankruptcy | Reuters

Texas power company Energy Future proposes prepackaged bankruptcy
| Reuters

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 a 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 taking on equity.
Energy Future is trying to restructure more than $30 billion in debt after a buyout by a consortium including KKR & Co (KKR.N), TPG Capital Management TPG.UL and Goldman Sachs Group Inc's (GS.N) private equity arm. The $45 billion TXU buyout, which loaded the company with debt, is viewed as one of the most spectacular failures of the last decade's buyout boom.
The company has a large and complex capital structure, and industry experts have speculated about which entities may be headed for bankruptcy and which could be spared.
The company has ringfenced Oncor TXEFHO.UL, its regulated power delivery business, in hopes of keeping it solvent, and the restructuring proposal revealed on Monday would not have included that unit or the holding company that owns its equity.