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Biggest Lbo Ends In Bankruptcy As Energy Future Files; Ranks With Enron's Collapse

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Bloomberg 28/4/14

'Energy Future Holdings Corp., the Texas power company Henry Kravis and David Bonderman took private in 2007 in the biggest-ever leveraged buyout, filed for bankruptcy after reaching a deal to cut billions in debt.

The company has about 9,100 employees, most of whom work in three main businesses: electricity generation, retail electricity sales, where they face competition, and the rate-regulated transmission and distribution business, according to a filing.

About $31 billion of its funded debt was issued by the generation business and its affiliates and $7.7 billion by the entity that owns Oncor.

Today’s petition listed assets of $36.4 billion and debt of of $49.7 billion. The bankruptcy ranks with Enron Corp.’s $48.9 billion collapse in 2001. Billionaire Warren Buffett called his $2 billion investment in Energy Future bonds “a big mistake.”

Texas’s largest electricity provider traces its roots to a business that first powered electric lights in Dallas in 1882. The 2007 going-private deal, coming at the peak of a three-year boom in leveraged buyouts, turned into a big loss for Kravis’s KKR & Co. (KKR), as well as Bonderman’s TPG Capital and Lloyd Blankfein’s Goldman Sachs Capital Partners, which loaded the company with debt.

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