HOUSTON — Energy Future Holdings said it took a month-long extension on more than $100 million in debt payments due Tuesday as it plans a possible bankruptcy restructuring with its stakeholders.
In regulatory filings, the Dallas power company said “constructive” talks with creditors had prompted it to delay the payments while it weighs options in filing for Chapter 11 bankruptcy protection.
“The company believes an agreement on a restructuring plan would minimize time and expense spent in a restructuring,” Energy Future Holdings said in a written statement. “While no agreement has been reached, and there is no guarantee that an agreement will be reached, negotiations are ongoing.”
The company owed on Tuesday about $109 million in interest on corporate debt that matures as early as 2020.
Energy Future Holdings, which owns billions in coal-fired plants and other power assets, said it expects to keep paying its employees, providing services to its retail customers and meeting other obligations even in bankruptcy. It said it is aiming for a plan that would build a sustainable capital structure by maintaining its businesses, like retail electricity, and its workforce.
The power company also said it has asked U.S. regulators for an extension in filing its annual 10-K report, which it expects will contain an accounting firm’s “substantial doubts” about its ability to stay out of bankruptcy protection this year.
That would make for one of the largest bankruptcies of a non-financial company since the 1980s. Energy Future Holdings has about $41 billion in debt and said it had about $760 million in cash on March 25.
Seven years ago, KKR & Co., Goldman Sachs and TPG Capital assembled $45 billion from private equity shops to execute the one of largest leveraged buyouts in U.S. history. They bet fortunes that electricity prices would skyrocket under increased demand.
But in recent years, natural gas prices nosedived after U.S. energy producers tapped into ample shale supplies, making the retail electricity business much less profitable. The company added 1,900 jobs and spent $10 billion on capital investments since 2007.
Billionaire investor Warren Buffett last month said he regretted the $2 billion chunk of debt he contributed to the buyout, which he sold for $259 million last year.