NEW YORK – U.S. power company Energy Future Holdings (EFH), once known as TXU Corp, has hired legal and financial advisors to lay the groundwork for a potential restructuring, according to a source familiar with the matter.
According to the source, Energy Future Holdings has hired law firm Kirkland & Ellis and financial advisor Blackstone Group LP to advise the company on ways to deal with its heavy debt load.
TXU was taken over in 2007 by private equity for around $45 billion, including debt, in the largest ever leveraged buyout. The deal was led by buyout firms KKR & Co and TPG Capital Management .
The source spoke on the condition of anonymity because the matter is confidential.
Debtwire previously reported that EFH had hired Kirkland & Ellis, while the Wall Street Journal reported that Blackstone had been hired.
Energy Future Holdings is now struggling under a heavy debt load as natural gas prices have fallen sharply since 2007.
The TXU takeover was built on hopes that natural gas prices would stay high. But they have instead slumped since the deal was announced, with benchmark U.S. prices dropping around 56 percent to around $3.28 per million British thermal units from around $7.50 per mmBtu in February 2007.
That's bad for power companies in Texas where power prices generally track natural gas prices.
EFH declined to comment on the Debtwire report. Kirkland and Blackstone did not respond to calls for comment.
(Reporting By Greg Roumeliotis and Michael Erman; Editing by Alden Bentley and Ed Davies)