Feb 19 U.S. power company Energy Future Holdings
, formerly TXU Corp, said it could go into
bankruptcy, liquidation or insolvency if lenders or noteholders
accelerate repayment of all borrowings.
A source familiar with the matter told Reuters earlier this
month that the company had hired law firm Kirkland & Ellis and
asset manager Blackstone Group LP to advise on ways to
deal with its debt load, which totaled $52 billion at the end of
"If lenders or noteholders accelerate the repayment of all
borrowings, we would likely not have sufficient assets and funds
to repay those borrowings," Energy Future Holdings said under
the risk factors section of a regulatory filing on Tuesday.
The company in January extended the maturity date of a $16.5
billion term loan to 2017 from 2014. It has also exchanged debt
on which it owed cash payments for debt on which interest
payments could be deferred.
The hiring of advisers came just months before the company,
taken private in 2007 in the largest leveraged buyout ever, must
start making payments on some of its debt.
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 took the
The TXU takeover was built on hopes that natural gas prices
would stay high. Instead, they have dropped sharply, with
benchmark U.S. prices falling about 57 percent to around $3.22
per million British thermal units now from around $7.50 per
mmBtu in February 2007.
Energy Future Holdings is the largest power generator in
Texas and has three units. The merchant power unit, Luminant,
which owns more than 15,000 megawatts of nuclear, coal and
gas-fired power plants, and its retail business, TXU Energy, are
unregulated. Its power delivery business, Oncor, is regulated.