Energy Future Holdings says U.S. tax ruling could save it billions
NEW YORK, April 3
NEW YORK, April 3 (Reuters) - Energy Future Holdings, the struggling power company formerly known as TXU Corp, said on Wednesday it had received a ruling from U.S. tax authorities that could potentially save the company billions of dollars if it restructures.
The Internal Revenue Service ruled that the company can eliminate a $19 billion excess loss account and $4 billion deferred intercompany gain, without accounting for them as taxable income, according to a filing with regulators.
Those items were generated when Energy Future Holdings (EFH) was taken private in 2007 in the largest ever leveraged buyout.
EFH, which revealed the tax ruling in a filing with the U.S. Securities and Exchange Commission, previously said that the two items might be counted as taxable income in some situations. Those included the company's separation from the unit that holds its unregulated power businesses, called Energy Future Competitive Holding Co.
EFH has said it has no plans to separate Energy Future Competitive Holding from the parent company. But restructuring experts and people close to the case expect Energy Future will eventually try to put the struggling unregulated power businesses into bankruptcy, while attempting to keep the parent company and regulated utility Oncor out of bankruptcy.
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. KKR & Co, one of the private equity firms that led the TXU deal, has written off 95 percent of the value of its investment in the company. TPG Capital Management and Goldman Sachs Group Inc's private equity arm were also part of the consortium that bought TXU.
- Total CEO de Margerie killed in Moscow as jet hits snow plow |
- Pistorius starts five-year term for killing Reeva Steenkamp
- Ebola crisis turns a corner as U.S. issues new treatment protocols
- Fashion designer Oscar de la Renta dead at 82 |
- U.S. Congress examining deal between NSA official, ex-agency chief