Creditors of bankrupt Energy Future Holdings, Texas's biggest power company, urged a judge to slow its chapter 11 case and warned if a key refinancing proposal was approved it might block better deals from being considered, Reuters reported yesterday. In the past week, the company's majority stake in a powerlines business known as Oncor has sparked a flurry of activity comparable to a merger-type bidding war as creditors scramble to get their hands on the unit's steady cash flow. The company wants Bankruptcy Judge Christopher Sontchi to allow its EFIH unit, which owns Oncor, to borrow around $2 billion to fund a settlement that will redeem high-yield debt, saving $11 million a month in interest payments. The loan is backed by the company's unsecured bondholders. Creditors not involved in financing the DIP, or debtor-in-possession, loan have called it "unprecedented" because it will convert into a stake of about 60 percent of Energy Future when the company exits bankruptcy. The potential to gain control over the power company has sparked competing DIP loan proposals, including one with $1.6 billion of backing by NextEra Energy Inc, a Florida company that also has a large Texas presence.
