Ahead of PUCT Rejection, NextEra Sought Leverage over Energy Future Creditors

Ahead of PUCT Rejection, NextEra Sought Leverage over Energy Future Creditors

May 16, 2017

by Margarita Fournier, Copyright 2016 by Competitive Assets, LLC.  All rights reserved

On 5/12/17, S&P Global reported that “Elliott Management Corp.’s pursuit of an alternative reorganization plan for Energy Future Holdings Corp., or EFH, has shed light on the effort by NextEra Energy Inc. to exert bargaining power over creditors, in anticipation that Texas regulators would reject its $18.7 billion bid for Oncor Electric Delivery Co. LLC…. Elliott described in its complaint an April 5 meeting in New York with creditors, where NextEra representatives used the expected PUCT ruling to put pressure on institutional creditors, creating a ‘Hobbesian choice’ between taking less on the deal or incurring fees tied to the deal’s termination. In the meeting, NextEra sought $500 million or more in price concessions from creditors, which in turn would be remitted back to Oncor ratepayers in cost savings, effectively sweetening the deal for the PUCT and intervening parties.”

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