3-8-18 12:59 PM EST | Email Article
By Peg Brickley 

Texas regulators that killed two earlier deals for a major piece of the state's power infrastructure, Oncor, Thursday gave the nod to Sempra Energy's $9.45 billion deal for a majority stake.

Sempra, of California, was the winner of a competition that lasted years, a contest for the thriving transmissions business that dominated the bankruptcy of Energy Future Holdings Corp., the former TXU Corp.

The Public Utility Commission of Texas voted to approve Sempra's buyout of Energy Future's 80% stake in the business, which carries power to millions of people.

Earlier contenders included Hunt Consolidated Inc., which attempted a feat of financial engineering that worried regulators, and NextEra Energy Inc., a Florida power company that balked at safeguards regulators insisted on for Oncor.

Last summer, Sempra topped an offer from Warren Buffett's Berkshire Hathaway Energy Co., then sat down with Texas groups that had opposed the Hunt and NextEra deals. Sempra agreed to protections to keep Oncor under local management, and protected its balance sheet, winning support for its deal from cities and major industrial power customers, among others.

Cash from the Sempra deal will be divided among creditors of Energy Future, which filed for chapter 11 bankruptcy protection in April 2014, burdened with $42 billion in leveraged buyout debt.

Most of the former TXU Corp., businesses that generate and sell power, exited bankruptcy in 2016, to become Vistra Energy. The chapter 11 plan for the so-called T-side of Energy Future's business resolved the bulk of the LBO debt.

Energy Future, the holding company, was left in chapter 11, with its Oncor stake to sell and billions of dollars in debt to pay off.

The regulated power-carrying business was a little-noticed element of the 2007 LBO by Kohlberg Kravis Roberts, TPG and a Goldman Sachs affiliate. As energy prices dove, plunging Energy Future into a contentious bankruptcy, creditors began referring to Oncor as a crown jewel, worth enough to make good some of their losses.

Write to Peg Brickley at peg.brickley@wsj.com


(END) Dow Jones Newswires

March 08, 2018 12:59 ET (17:59 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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