Energy Future Should Kill Borrowing Plan, Creditors Say
Energy Future Holdings Corp.’s official creditors’ committee said the company should scrap a plan to borrow another $2 billion to help it restructure because the loan wouldn’t save it any money.
By using its available cash instead to refinance debt, the bankrupt power company could save itself from paying costly fees and penalties attached to retiring high interest securities, the committee and its advisers said in court filings yesterday.
The creditors’ objection to the loan plan, up for a judge’s consideration next week, was one of about eight filed or endorsed by lenders.
One group of investors offered a restructuring plan for the Texas power provider that would allow junior creditors to recover more money than under the company’s own proposal and put NextEra Energy Inc. in control of its more profitable business.
NextEra and investors in the unit that controls Energy Future’s Oncor transmission business floated the plan in a June 18 letter to Chief Financial Officer Paul Keglevic, filed this week in U.S. Bankruptcy Court in Wilmington, Delaware.
Energy Future has said the loan, part of a larger borrowing, is essential to its plan to reduce the cost of debt taken on in a 2007 buyout.
The bankruptcy case is Energy Future Holdings Corp., 14-bk-10979, U.S. Bankruptcy Court, District of Delaware (Wilmington).
Source: bloomberg
