Energy Future Holdings Faces Probable Bankruptcy In Fall 2014

2014 is likely to be a rough year for merger and acquisition activity in Texas — with one of the biggest deals in the state's history likely to unravel in the second half.

Jonathan Marino, senior editor for financial news service The Deal, says the new year will start out with a lot of deal “digestion” in Texas — most notably, the privatization of Dell by founder Michael Dell and Silverlake Partners.

“But the future probably isn’t that bright elsewhere in Texas, and I’m specifically referring to TXU Corp., now known as Energy Future Holdings — which, after its $45 billion LBO in 2007, in all likelihood, will either face restructuring or a Chapter 11 bankruptcy filing in 2014.”

Energy Future Holdings is the parent company of power generator Luminant, retailer TXU Energy, and distribution network Oncor. A group of three private equity firms acquired the company at the peak of the leveraged buyout market.

In the six years since, Energy Future Holdings has struggled under its debt load. It faces a four billion dollar debt payment this fall, which Marino says it’s unlikely to meet. He says a bankruptcy deal would probably break the company up into its component parts.


Andrew Schneider

Andrew Schneider

Politics and Government Reporter

Andrew heads Houston Public Media’s coverage of national, state, and local elections. He also reports on major policy issues before the Texas delegations in the U.S. House and Senate, as well as the Texas governorship, the state legislature, and county and city governments. Before taking up his current post, Andrew...

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