Bondholders that have raised billions to buy Energy Future Holdings Corp.’s prized business, Oncor, will get a shot at pulling off their deal, The Wall Street Journal reported yesterday. Loaded with $42 billion in debt, Energy Future has been looking for a way out of bankruptcy since last year. Energy Future believes a buyout offer for Oncor from junior bondholders, in an alliance with Hunt Consolidated Inc., is “the superior path” to the exit. Besides Hunt, backers of the bondholder buyout include Anchorage Capital Group, Arrowgrass Capital Partners, Centerbridge Partners, the Blackstone Group’s GSO subsidiary, Avenue Capital Group and Teacher Retirement System of Texas. A cash-generating Texas transmissions business, Oncor operates free of the financial troubles that pushed Energy Future into chapter 11 protection. Until recently, it was destined for the bankruptcy auction block. Energy Future scrapped plans to sell Oncor at auction after bondholders campaigned to capture the value for creditors, through an in-bankruptcy buyout.
