(Adds details of both proposals)
By Tom Hals
June 24 Energy Future Holdings rejected an
unsolicited $2.3 billion restructuring plan by NextEra Energy
Inc that would have given the alternative energy group a
large stake in Energy Future's power lines unit, according to
The proposal, which was revealed in court filings late
Monday, was developed by NextEra and a group of investors that
hold second-lien notes issued by Energy Future's EFIH unit,
which in turn controls the Oncor power distribution business.
EFIH, or Energy Future Intermediate Holding, rejected the
proposal in favor of a plan already advanced by a group of
investors who hold the unit's unsecured bonds, according to
filings with the U.S. Bankruptcy Court in Wilmington, Delaware.
Both proposals take the form of a loan to refinance EFIH's
high-yielding second-lien notes, which would cut interest costs.
Rather than repay the loan, when EFIH emerges from bankruptcy
the financing would convert into an equity stake of a little
more than 60 percent of the company.
Shares of NextEra, the largest U.S. generator of renewable
energy, closed up 1.1 percent at $100.73, near a 52-week high,
on the New York Stock Exchange. The company is based in Juno
Beach, Florida and a company spokeswoman said NextEra does not
comment on potential transactions.
Court filings reveal a flurry of last-minute changes to the
two loan proposals as each group jockeyed to win over a meeting
of the board of managers of EFIH on Sunday.
In its final proposal, NextEra planned to contribute $1.6
billion to the package, according to court filings.
Backers of the proposed NextEra loan said in court papers
their proposal carried a lower interest rate, offered more money
to unsecured creditors and would pay second-lien noteholders an
early redemption payment, ending litigation on the issue.
The company's board opted on Sunday to stick with the loan
proposed by its unsecured bondholders, in part because the
NextEra loan did allow the company to pursue other deals,
according to court filings.
NextEra and its second-lien noteholder partners could still
get their loan approved. They asked Judge Christopher Sontchi to
reject the unsecured creditors loan proposal when he hears the
issue on June 30.
Energy Future filed one of the largest U.S. bankruptcies in
April and seeks to restructure more than $40 billion in debt as
it was squeezed by falling natural gas prices.
Energy Future also plans to spin off the unit that owns the
TXU Energy retail utility and the power generating business
known as Luminant to holders of $24.4 billion in secured debt.
That part of its restructuring would not be affected by
The case is In Re: Energy Future Holdings Inc, U.S.
Bankruptcy Court, District of Delaware, No. 14-10979
(Reporting by Tom Hals in Wilmington, Delaware; Editing by