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.