Energy Future Holdings Corp. can sell its Oncor electricity distribution business to NextEra Energy Inc. after receiving approval from the court handling the bankruptcy of the energy giant.
All told, NextEra will pay about $4.4 billion in cash and assume debt and other liabilities bringing the transaction to more than $18.4 billion.
The approval came after NextEra increased its offer by $300 million in cash and made other changes that satisfied Energy Future creditors.
The next step for NextEra Energy is to receive approval from the Public Utility Commission of Texas for the transaction. Oncor is the state’s largest electric utility, providing service in 91 counties, most in North Texas and West Texas.
“We are pleased by today’s bankruptcy court ruling and view it as an important next step in the process to acquire Oncor,” said Jim Robo, chairman and chief executive officer of NextEra Energy. “Our proposed transaction provides Oncor with a financially strong, utility-focused owner that shares Oncor’s commitment to providing customers with affordable, reliable electric delivery service and significant value and certainty for the EFH bankruptcy estate.”
Energy Future filed for bankruptcy protection in April 2014 with almost $50 billion in debt. The company had been acquired in 2007 by KKR & Co., Fort Worth and San Francisco-based TPG Capital, and Goldman Sachs Capital Partners. Much of the debt resulted from that leveraged buyout.
Dallas-based Energy Future came close to selling Oncor to a group led by members of the Hunt family, but that fell through. Oncor’s takeover is seen as key to Energy Future’s emergence from bankruptcy after restructuring almost $50 billion in debt.