Bankruptcy Court Allows Energy Future to Sell Oncor Electric to NextEra Energy

by San Antonio Attorney

Energy Future Holdings has obtained court approval to sell Oncor to NextEra Energy, taking the two-year case one step closer to the finish line.

The confirmation came about after NextEra added $300 million to its offer as well as made adjustments to get the approval of the creditors, such as Fidelity Management & Research. At a recent court hearing, the lawyer of Energy Future said unsecured creditors are going to receive an additional $450 million.

The proposal requires NextEra tp pay around $4.4 billion in cash and undertake debt as well as asbestos liabilities arising from the distribution company, the biggest power-line business in Texas. The initial worth of the deal was around $18.4 billion.

In spite of the bigger payment, the transaction is favorable for NextEra, according to portfolio manager John Bartlett. He said it is a reasonable price to obtain more certainty.

In April 2014, Energy Future sought for bankruptcy protection with about $50 billion in liabilities. In September, the court approved a reorganization plan of its power-generating enterprise and turnover to its senior lenders.

The bankruptcy case continues as Energy Future and NextEra must get the support of Texas regulators in order to close the deal. Moreover, Sontchi should still endorse Energy Future’s proposal to distribute the proceeds of the sale.  So far, Fidelity and Contrarian Capital Management withdrew their objection to the NextEra pact.

The modified sale plan will increase payments to unsecured creditors.

The plan includes breakup fee payment to NextEra amounting to $275 million if it receives a higher offer at the last minute or in case regulators disapproves the sale  and Energy Future needs to alter the distribution unit and hand it over to the creditors.

NextEra showed interest in acquiring Oncor before, but it was opposed by an alliance of creditors along with Hunt Consolidated of Dallas.

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