Energy Future quarterly loss narrows to $71 million

Energy Future Holdings Corp., the Texas power company seeking to restructure at least $32 billion of debt, said its quarterly loss narrowed as it reported a gain from interest-rate swaps.

The second-quarter loss narrowed to $71 million from $696 million a year earlier, the Dallas-based company said in a filing with the U.S. Securities and Exchange Commission made public today. Excluding one-time items, the net loss was $450 million, compared with $233 million a year earlier, as sales fell at its competitive power business because of mild weather and refueling of a nuclear plant.

Energy Future, formerly known as TXU, has struggled to reduce debt since it was taken private by KKR & Co. and TPG Capital six years ago in the largest leveraged buyout in history. Wholesale electricity rates have dropped as natural gas prices declined about 70 percent from a July 2008 high.

Total debt rose to $43.55 billion among all the company’s units as of the end of June, from $43.4 billion at the end of the first quarter. The company said in April that creditors had rejected a pre-packaged bankruptcy plan to restructure $32 billion in debt held by Energy Future’s competitive power unit. The plan called for creditors to forgive obligations in exchange for equity and $5 billion in cash and new debt.

The company said today it has “engaged in additional discussions regarding possible changes to our capital structure” and continues to evaluate future changes, which may include voluntarily filing for Chapter 11 bankruptcy for some or all of the company.

Energy Future’s units include Luminant, which owns more than 15,400 megawatts of power plant capacity in Texas; TXU Energy, a retail electricity seller; and Oncor Electric Delivery, a regulated power-line unit that supplies electricity to more than 3 million homes and businesses.

Energy Future’s Texas Competitive subsidiary owns Luminant and TXU Energy. The unit’s $1.83 billion of 10.25 percent notes due November 2015 traded at 6.5 cents on the dollar on July 25, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.