Efforts to restructure Energy Future Holdings are progressing, albeit slowly, as the embattled Texas utility moves toward an expected bankruptcy filing, Reuters reported yesterday. The company said in a U.S. Securities and Exchange Commission filing yesterday that talks will continue and negotiating stakeholders will remain bound by non-disclosure agreements. Energy Future Holdings is expected to file for bankruptcy around the end of the month, at the expiration of a 30-day grace period on skipped interest payments. For lenders to Energy Future's competitive merchant power business, who hold about half of the company's more than $40 billion in total debt, the main discussion point is tax liability. The lenders, which include private equity giants like Apollo Global Management and Oaktree Capital Group, are warming to the idea of a deal that does not include the so-called "tax basis step-up" they were initially seeking. The lenders had hoped to acquire the power merchant unit through bankruptcy using the debt they are owed, which would allow them to increase, or "step up," the unit's tax basis and save money on future taxes, perhaps more than $1 billion.
