EFH creditors remain at odds on bankruptcy talks -sources

Reuters

By Michael Erman and Billy Cheung

NEW YORK, Oct 14 (Reuters) - The creditors of Energy FutureHoldings remain at odds over how to split the company's equityin an expected bankruptcy as their confidentiality agreementslapse, according to several sources familiar with the matter.

Secured lenders at Texas Competitive Electric Holdings,which represents Energy Future's unregulated subsidiary, andunsecured bondholders at Energy Future Intermediate Holdings(EFIH), Energy's Future's regulated subsidiary, were in directnegotiations previously. But the EFIH unsecured bondholders haveso far been reluctant to resign confidentiality agreements,according to one of the sources.

If they don't resign confidentiality agreements, thecreditors will make public the details of their talks in afiling with the Securities and Exchange Commision as early astomorrow, the sources said.

EFH, saddled with $40 billion of debt, wants to finalize arestructuring plan before $250 million worth of bond paymentsare due on Nov. 1. Filing for bankruptcy before Nov. 1 wouldsuspend the bond payments; but filing without a restructuringplan could entail years of battles and competing restructuringplans in bankruptcy court.

EFH, formerly TXU Corp, was taken private in 2007 in a $45billion buyout, the largest-ever leveraged buyout. The dealsaddled the company with debt just before a major decline innatural gas prices and energy markets.

The buyout consortium included private equity firms KKR & CoLP, TPG Capital Management LP and Goldman SachsGroup Inc's private equity arm.

EFH's capital structure includes more than $32 billion ofdebt split up into various categories at the holding company ofits unregulated retail and merchant power units, and another$7.7 billion in senior and junior debt at Energy FutureIntermediate Holding Company LLC (EFIH), the parentof its regulated power distribution business, Oncor ElectricDelivery Company.

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