Bloomberg News

Energy Future Creditors Said to Hire Millstein for Debt Talks

February 27, 2013

Jim Millstein, the U.S. Treasury Department’s former chief restructuring officer, and his firm Millstein & Co. have been retained by senior creditors to Energy Future Holdings Corp.’s competitive power unit, a person with knowledge of the matter said.

Millstein will act on behalf of first-lien lenders to Texas Competitive Electric Holdings, said the person, who asked not to be identified because the process isn’t public. The senior lender group includes Franklin Resources Inc. (BEN:US), Apollo Global Management LLC (APO:US), Oaktree Capital Group LLC (OAK:US) and GSO Capital Partners, other people familiar with the matter said earlier this month. Moody’s Investors Service said in a note yesterday that it expected the company to restructure in six to 12 months.

Energy Future, formerly known as TXU Corp., was taken private by KKR & Co. (KKR:US), TPG Capital and Goldman Sachs Capital Partners for $48 billion in the biggest leveraged buyout in history. KKR and TPG hired Blackstone Group LP (BX:US), GSO Capital’s parent, to help restructure Energy Future’s debt load, while Energy Future has retained Evercore Partners Inc. (EVR:US) and Kirkland & Ellis, other people familiar with the discussions said earlier this month. Energy Future had $37.8 billion of long-term debt as of Dec. 31, according to Securities and Exchange Commission filings.

The company’s regulated utility Oncor had $5.4 billion in long-term debt as of Dec. 31, according to SEC filings. The unit enlisted the New York-based restructuring firm Miller Buckfire & Co., a unit of Stifel Financial Corp., people familiar with those discussions have said.

Representatives of Energy Future and Millstein & Co. declined to comment on the firm’s retention.

Gas Prices

Energy Future’s competitive unit may run out of cash in early 2014 after a plunge in natural gas prices that lowered power rates in Texas, Moody’s said yesterday in its research note. Texas Competitive faces an October 2014 repayment deadline for loans of $3.8 billion.

Millstein’s hiring by creditors was reported earlier by the Financial Times.

At Treasury, Millstein oversaw American International Group Inc. (AIG:US)’s restructuring. He was formerly co-head of corporate restructuring at Lazard Freres & Co., and earlier led corporate restructuring at the law firm Cleary Gottlieb Steen & Hamilton LLP.

To contact the reporters on this story: Beth Jinks in New York at bjinks1@bloomberg.net; Mark Chediak in San Francisco at mchediak@bloomberg.net

To contact the editors responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net; Susan Warren at susanwarren@bloomberg.net


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Companies Mentioned

  • BEN
    (Franklin Resources Inc)
    • $56.95 USD
    • -0.04
    • -0.08%
  • APO
    (Apollo Global Management LLC)
    • $24.53 USD
    • 0.42
    • 1.71%
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