NEW YORK (Reuters) – Energy Future Holdings has extended the deadline for early offers in its debt exchange, a massive debt restructuring that ran into opposition from bondholders, according to a company statement.
The deadline for early tenders is now 5 p.m. (2100 GMT) Oct 23, New York City time, Energy Future Holdings said on Monday. The original deadline was 5 p.m. (2100 GMT) Oct 19. The deadline for consenting to amendments of bond indentures also moved to Oct 23 from Oct 19.
Energy Future, formerly known as TXU, has been trying to reduce its $43 billion debt load by about $2 billion by offering to exchange outstanding debt for new notes at steep discounts.
Franklin Templeton Investments and other major bondholders holding more than 50 percent of bonds targeted in the debt exchange have formed a group to oppose it, a source close to the deal has said.
Bondholders believe the discounts are too steep now that the bond markets have recovered from a sell-off earlier this year, according to analysts. Debtholders are also opposed to amendments Energy Future is seeking that could make it easier for the company to sell its prized transmission business, Oncor.
Bondholders are being offered between 46.5 cents and 74.5 cents on the dollar if they exchange their debt by the early tender deadline. They will receive slightly less if the bonds are exchanged after that. The offer expires Nov. 3.
Energy Future took on a great deal of debt when Kohlberg Kravis Roberts & Co, TPG Capital and Goldman Sachs Capital Partners took it private in the largest leveraged buyout ever in 2007. The company has been burning cash since the market for power worsened and a weak economy hurt demand. (Reporting by Dena Aubin; Editing by Theodore d’Afflisio)