Luminant, TXU emerge from bankruptcy as one company

Luminant and TXU Energy, the two unregulated subsidiaries of Energy Future Holdings, have emerged from bankruptcy court as a new company called TCEH Corp., the company announced today.

The Dallas-based company, which produces and sells electricity in North Texas, will act as a standalone company through a tax-free spinoff of Energy Future Holdings. The restructuring eliminates more than $33 billion in debt, according to the new company.

TCEH will be led by Curt Morgan, a 35-year veteran of the utility world who most recently was a consultant for the company’s creditors. He previously was an operating partner at Energy Capital Partners, a private equity firm focused on investing in North America’s energy infrastructure.

“TCEH Corp. emerges from the restructuring process with a superb integrated business,” Morgan said in a prepared statement. “This includes TXU Energy and Luminant — both of which are competitive, well-resourced and positioned for continued operational excellence in the growing Texas market with a strong balance sheet and the potential for stable earnings and significant cash generation.”

EFH and Energy Future Intermediate Holding Company LLC, which own an indirect 80 percent equity interest in Oncor, remain in Chapter 11 and are proceeding toward confirmation and emergence on a separate, standalone schedule.

Late last month, EFH won approval in court to sell Oncor to Florida-based NextEra Energy, bringing the biggest U.S. power company bankruptcy one step closer to a conclusion more than two years after it began.

TCEH Corp. includes Luminant, the state’s largest electric power generator, and TXU Energy, a retail electricity provider. The companies have almost 17,000 megawatts of generation and 1.7 million retail customers, respectively, according to the TCEH release.

The plan for the new company satisfies necessary conditions, including regulatory approvals required by EFH’s reorganization plan that was approved Aug. 29 by the U.S. Bankruptcy Court in Delaware.

TCEH’s liquidity position is estimated to be approximately $1.65 billion, including $750 million of undrawn net borrowings available under the company’s new $4.25 billion financing facility, the company stated.

This story contains material from the Star-Telegram archives.

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This story was originally published October 4, 2016 at 12:05 PM with the headline "Luminant, TXU emerge from bankruptcy as one company."