Seeking Alpha

P-E firms battle as Energy Future heads towards bankruptcy

  • An almighty fight has been brewing between private-equity firms over who will get paid what in the expected bankruptcy filing of Texas power company Energy Future Holdings, which owes over $40B to creditors.
  • One group of debtees includes Apollo Global (APO) and Oaktree Capital, and another involves Blackstone Group's (BX) GSO Capital Partners.
  • Meanwhile, Energy Future's owners, KKR (KKR), TPG and Goldman Sachs (GS), which bought the utility in 2007 for $32B plus about $13B in assumed debt, are hoping to keep some equity in any Chapter 11. They've already written their investment down to almost zero.
  • Complicating matters is that if Energy Futures were to break up, a massive tax bill would need to be paid.
  • The sides are due to meet on Friday to try to resolve the dispute.
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