Energy Future Holdings plans interest payments to creditors- source
Sources told Bloomberg that Energy Future Holdings Corp was planning to pay USD 270 million worth of interest to its creditors amid a possible bankruptcy approach. The people with knowledge of the situation said the Texas-based company was thinking of paying the interest to junior bondholders unless the parties would be able to come up with a new agreement.
The source added that the power producer and its creditors were in talks about how to divide ownership of the firm and the restructuring of its debt. Senior lenders wanted Energy Futures to file for bankruptcy without paying creditors. The payments would reduce their recoveries. Secured lenders, meanwhile, proposed a reorganization plan for the firm.
The deadline for payment of the coupons is at midnight tonight New York time. If the board would decide not to pay, Energy Futures would have a grace period of one month. During that time, they can decide to pay the creditors or file for bankruptcy protection.