(Reuters) - Energy Future Holdings filed for Chapter 11 protection on Tuesday, seven years after it was taken private in the largest-ever leveraged buyout. Over the last five years, the company used a number of financial maneuvers to manage a significant debt load, but ultimately could not convince its many and disparate creditors to restructure its balance sheet outside of bankruptcy court.
Here is a timeline of key events leading to the company’s bankruptcy:
February 2007: Kohlberg Kravis Roberts & Co (KKR.N), Texas Pacific Group TPG.UL and Goldman Sachs’s (GS.N) merchant banking arm announce a $45 billion leveraged buyout of TXU Corp. Financing consists of $26.1 billion in new credit facilities, $11.25 billion in bridge loans and $8 billion in equity from deal sponsors.
October 2007: Despite leveraged credit and equity markets faltering during the summer, the buyout closes. TXU is renamed Energy Future Holdings.
November 2008: A 19.75 percent interest in Oncor, Energy Future’s regulated transmission business, is sold to an investor group for $1.3 billion. Proceeds are used to repay intercompany debt.
May 2009: Energy Future exercises pay-in-kind feature on certain unsecured bonds to conserve liquidity. Instead of paying cash interest on bond coupons, the company finances the payments through additional bond issuances.
August 2009: Lenders amend credit agreements to allow the extension of bank debt maturities and increase the ability to issue additional secured debt.
November 2009: Company makes debt exchange proposal, offering $3 billion in new secured debt in exchange for approximately $4.5 billion in unsecured debt. Bondholders are wary of offer as only $350 million in unsecured bonds are exchanged for about $250 million in new secured debt.
August 2010: Energy Future Intermediate Holdings, a subsidiary of Energy Future, issues $2.2 billion in new secured debt and pays $500 million in cash in exchange for $3.6 billion in unsecured debt.
November 2010: Energy Future completes private debt exchange in which $884 million in new junior secured debt is swapped for approximately $1.3 billion in unsecured debt.
February 2011: Aurelius Capital, a company lender, alleged that Energy Future violated loan covenants that could trigger a default, claiming an outstanding $1.9 billion loan made between the company and a subsidiary was not at “arm’s length.”
April 2011: Energy Future convinces lenders to extend the maturity of $15.4 billion in bank debt to October 2017 from October 2014, and to acknowledge that the terms of the intercompany loan were advanced at “arm’s length.”
December 2012: Investors agree to exchange $1.6 billion in unsecured bonds issued by the Energy Future Holdings parent into unsecured bonds at the Energy Future Intermediate subsidiary, which owns the company’s regulated businesses.
January 2013: Banks agree to extend the remainder of a credit line to October 2016 from October 2013.
April 15, 2013: In a U.S. Securities & Exchange Commission filing, Energy Future Holdings discloses the hiring of restructuring advisers and a proposed restructuring plan, which is rejected by creditors. The plan would have handed 85 percent of company ownership and $5 billion of cash to lenders in exchange for debt. Equity sponsors would have retained 15 percent ownership.
Summer 2013: Restructuring talks extend to include advisers for certain unsecured bondholders.
September 2013: Restructuring talks intensify as Fidelity Investments, which owns several tranches of Energy Future debt, hires its own restructuring advisers.
October 15, 2013: In an SEC filing, Energy Future Holdings outlines three separate restructuring proposals by various creditors, including the company’s lenders, certain unsecured bondholders and Fidelity Investments.
November 1, 2013: Defying market expectations, Energy Future makes coupon payment to unsecured bondholders, avoiding default and extending restructuring talks.
March 31, 2014: Energy Future skips interest payments to bondholders, triggering a 30-day grace period to make the payments or face default.
April 15, 2014: Energy Future discloses it will not file its annual financial reports on April 15 as required by the SEC. Company says it expects auditors not to provide an opinion that it can continue as a going concern.
April 29, 2014: Energy Future Holdings files for Chapter 11 bankruptcy protection.
Reporting by Billy Cheung; Editing by Terry Wade and Jeffrey Benkoe