Post-Petition Goods and ServicesCourt Authorizes Access to $2.3 Billion of TCEH DIP FinancingSupports Continued High Levels of Service at Luminant and for TXU Energy Customers
DALLAS – Energy Future Holdings (EFH) announced today that the U.S. Bankruptcy Court for the District of Delaware has granted the relief requested by the company in key first day motions it filed in conjunction with its voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
“We are very pleased to have made a smooth transition into the Chapter 11 process with the approval of first day motions, including our TCEH debtor-in-possession financing, which supports the continuation of our normal day-to-day operations during the reorganization process,” said John Young, president and chief executive officer of EFH. “This helps to ensure that we will continue serving our customers and providing safe, reliable energy as we restructure our balance sheet and put the company on a sustainable path for a stronger future. Operational excellence has always been the hallmark of our company, and our customers, employees and business partners can continue to count on us during this process.”
As part of its filing under Chapter 11 of the U.S. Bankruptcy Code, the company presented first day motions intended to support the continuation of its normal course business operations for customers, employees and retirees, vendors and suppliers, and other business partners during the reorganization.
Among other things, the court granted the company’s requests to continue to:
- Pay and provide benefits to employees.
- Make qualified retirement plan payments and provide medical benefits to retirees.
- Honor all retail customer agreements while providing excellent customer service and actively competing in the marketplace.
- Pay vendors, suppliers and trading counterparties in the normal manner for all goods and services provided on or after the filing date of April 29, 2014.
The court also granted interim approval for the company to access $2.33 billion of its new $4.475 billion in debtor-in-possession (or “DIP”) financing for Texas Competitive Electric Holdings Company LLC (TCEH). The new financing, combined with cash flow generated by ongoing operations, will be available to TCEH to help support, among other things, normal business operations during the Chapter 11 process. The TCEH financing will also permit TCEH subsidiary Luminant Mining Company LLC to grant the Railroad Commission of Texas a collateral bond in an amount equal to or in excess of Luminant Mining’s current reclamation bond obligations. The company intends to continue to comply with all regulatory and tax obligations.
As previously announced, EFH has entered into an agreement with certain of its key financial stakeholders to reduce its approximately $40 billion of debt, lower its annual cash interest costs and access significant additional capital. The agreement is supported by holders of approximately 41% of the value of the TCEH first lien debt, 76% of the EFIH unsecured debt, 32% of EFIH first lien debt, 35% of EFIH second lien debt and 73% of EFH unsecured debt, as well as the three private equity holders of EFH.
To implement this pre-arranged restructuring plan, Energy Future Holdings Corp. and certain of its subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the District of Delaware. The main case number is 14-10979.
The company intends to file a plan of reorganization to implement the proposed restructuring agreement as soon as is practicable. The consummation of the plan of reorganization will entail certain regulatory approvals, including, among others, the approval of the tax-free transaction by the Internal Revenue Service and approvals by the Public Utility Commission of the State of Texas and the U.S. Nuclear Regulatory Commission.
- Information about EFH’s restructuring is available at www.energyfutureholdings.com/restructuring.
- Court filings and claims information are available at www.efhcaseinfo.com.
- Information about the restructuring for vendors and suppliers is also available toll-free at 877-276-7311.
- TXU Energy customers should continue to contact customer care at www.txu.com/contact.
- For high-quality, downloadable video of EFH, Luminant and TXU Energy operations, visit www.energyfutureholdings.com/news/downloads.aspx.
About Energy Future Holdings
EFH is a Dallas-based holding company engaged in competitive and regulated energy market activities, primarily in Texas. Its portfolio of competitive businesses consists primarily of Luminant, which is engaged largely in power generation and related mining activities, wholesale power marketing and energy trading, and TXU Energy, a retail electricity provider with more than 1.7 million customers in Texas. Luminant has approximately 15,400 MW of generation in Texas, including 2,300 MW fueled by nuclear power and 8,000 MW fueled by coal. Luminant is also one of the largest purchasers of wind-generated electricity in Texas and the United States. EFH’s regulated operations consist of Oncor, which operates the largest electricity distribution and transmission system in Texas with more than 3.2 million delivery points and 119,000 miles of distribution and transmission lines. While EFH indirectly owns approximately 80 percent of Oncor, the management of Oncor reports to a separate board with a majority of directors that are independent from EFH.
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. All statements, other than statements of historical facts, are forward-looking statements. Forward-looking statements in this press release include, without limitation, statements regarding the implementation of a restructuring plan and business operations during the pendency of the bankruptcy proceedings. Readers are cautioned not to place undue reliance on forward-looking statements. Although we believe that in making any such forward-looking statement our expectations are based on reasonable assumptions, any such forward-looking statement involves uncertainties and is qualified in its entirety by reference to the discussion of risk factors under Item 1A, “Risk Factors” and the discussion under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Reports on Form 10-K filed by each of EFH Corp., EFIH and EFCH and the following important factors, among others, that could cause actual results to differ materially from those projected in such forward-looking statements:
- our ability to obtain the approval of the Bankruptcy Court with respect to additional motions we may file in the bankruptcy proceedings;
- the effectiveness of the overall restructuring activities pursuant to the bankruptcy filing and any additional strategies we employ to address our liquidity and capital resources;
- the terms and conditions of any reorganization plan that is ultimately approved by the Bankruptcy Court;
- the actions and decisions of creditors, regulators and other third parties that have an interest in the bankruptcy proceedings;
- the duration of the bankruptcy proceedings; and
- restrictions on our operations due to the terms of debtor-in-possession financing facilities and restrictions imposed by the Bankruptcy Court.
Any forward-looking statement speaks only at the date on which it is made, and except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of them; nor can we assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. As such, you should not unduly rely on such forward-looking statements.
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