What's the Latest on Energy Future Holdings Debt Problems? Oct 14 2011Somervell County Salon-Glen Rose, Rainbow, Nemo, Glass....Texas


What's the Latest on Energy Future Holdings Debt Problems? Oct 14 2011

14 October 2011 at 5:30:58 PM

From Sep 2011

It’s unlikely Luminant has the cash to make the sort of investments it needs to reduce its coal-fired pollution. Its parent company, Energy Future Holdings, is struggling with mountains of high-priced debt from its ill-timed $43 billion buyout by two private equity firms in 2007.

That deal resulted from an unintended consequence of deregulation that made coal a profit machine. Electricity rates are tied to natural gas, and for most of the past decade, coal enabled companies to generate more cheaply, fattening their margins.

From June 2011- Warren Buffett and EFH

Buffett, by not swapping and holding on to loans that have principal due in 2015 and 2016, can in a few years give Kravis headaches.

"He has the ability to drive the [unregulated part of the] company into bankruptcy, but it would be cutting off his nose to spite his face," the strategist said.

Regardless, Energy Future Holdings may be facing a cash crunch in 2015 that could force the TCEH subsidiary into bankruptcy, the strategist said.

Buffett, who has compared private equity barons to porn shop operators, has clashed with Kravis before.


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