July 1, 2014 / 3:00 PM / 4 years ago

Key hearings in Energy Future bankruptcy extended to July 11

July 1 (Reuters) - Court hearings to determine if Energy Future Holdings Corp, Texas’s biggest power company, can adopt a refinancing package that is key to its massive bankruptcy have been extended through July 11 from the original schedule to end on Tuesday.

“I‘m worried about that amount of time being sufficient,” Judge Christopher Sontchi of the U.S. Bankruptcy Court in Wilmington, Delaware said at the start of Tuesday’s session.

“We have a lot of witnesses,” said Sontchi, who scheduled time in court on Wednesday and July 10 and July 11. The hearings started on Monday.

Sontchi is being asked to approve a loan package of about $2 billion to refinance high-yielding debt at Energy Future’s EFIH unit, which owns the profitable Oncor power transmission business.

The loan is being funded by unsecured bondholders of Energy Future. Rather than repay the loan, the bondholders propose that the financing should convert into about 60 percent ownership of Energy Future when it exits bankruptcy. The opportunity to gain control of the company has sparked two competing loan proposals from other creditors, including one that has $1.6 billion of financing from NextEra Energy Inc, a power company in Juno Beach, Florida.

Energy Future filed one of the largest U.S. bankruptcies in April, after years of lower-than-forecast power prices and burdened by more than $40 billion in debt.

Much of that debt was taken on in the 2007 record leveraged buyout of the former TXU Corp, led by KKR & Co, TPG Capital Management and the private equity arm of Goldman Sachs.

Separately, the company is planning to spin off to senior creditors its unregulated power generation unit known as Luminant and its TXU Energy retail utility. (Reporting by Tom Hals in Wilmington, Delaware; Editing by Tom Brown)

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