Energy Future Holdings says talks with creditors break off
Nov 1 (Reuters) - Energy Future Holdings, straining under $40 billion of debt, said talks with creditors had broken off, a day after sources said the company would make a critical interest payment.
The Texas-based power generator said that while its group companies were no longer in ongoing talks with the principals of any of its creditors, some creditors had directed their advisers to work on the terms of a consensual restructuring.
"The companies expect to continue to explore all available restructuring alternatives to facilitate the creation of a sustainable capital structure for the companies," Energy Future said in a filing with the U.S. Securities and Exchange Commission on Friday. (http://link.reuters.com/deg44v)
Energy Future made no mention of the bond payment in its filing. However, a person familiar with the matter told Reuters on Thursday that the company would make a payment of $270 million to some junior bondholders on Friday.
Energy Future's lenders had hoped the company would skip the bond payment and instead file for bankruptcy.
Energy Future Holdings was created in October 2007 in a $45 billion buyout of Dallas-based TXU Corp, the biggest electricity generating and distribution company in Texas.
The buyout, led by KKR & Co, TPG Capital Management LP and the private equity arm of Goldman Sachs, saddled the company with debt just as natural gas prices were about to plunge, making its coal-fired plants unprofitable.
(Reporting by Tanya Agrawal in Bangalore; Editing by Ted Kerr)