Hints and tips:
...EFH owns 80 per cent of Oncor, the crown jewel of the regulated transmission and distribution business that went bankrupt in 2014 under a huge pile of debt....
...On Monday, the deal was gatecrashed by Sempra Energy, a California energy utilities group, which received backing from Paul Singer-led hedge fund Elliott Management, EFH’s largest creditor....
...The move by Mr Singer, who made his own rival proposal to buy EFH in July, would have forced Berkshire to raise its offer or walk away from the deal....
...Elliott’s plan values EFH at $9.3bn....
...Berkshire’s energy arm had agreed in July to acquire the restructured EFH for $9bn in cash, implying an equity value of $11.25bn and an enterprise value of just over $18bn for Oncor....
...Bloomberg News first reported the news of Sempra nearing a deal with Oncor’s owner EFH....
...Sempra will pay approximately $9.45 billion in cash to acquire EFH and and its ownership in Oncor, and will assume Oncor’s debt....
...for Oncor, the regulated transmission and distribution business of which EFH owns 80 per cent....
...It emerged that several directors of other Aim companies had struck similar deals with EFH....
...EFH, bought for an enterprise value of $48bn, still has more than $40bn of debt....
...The impact on EFH’s finances has been brutal....
...Apollo, one of the biggest holders of EFH’s debt, sits on the other side of the table from its private equity rivals, underscoring the sometimes complicated nature of relations between private equity groups...
...KKR, TPG and Goldman contributed around $4.5bn in total, according to people familiar with situation, with the balance coming from co-investors such as other banks and smaller private equity outfits....
...Texas-based EFH is one of the companies affected – particularly through its subsidiary Luminant, which operates coal-fired and nuclear power plants....
...Julianne Bass, a portfolio manager for USAA, an asset manager and insurer, estimates that for EFH to survive, it needs gas prices of around $6 per MMBTU....
...The overarching problem for EFH is the price of natural gas, which is the primary driver of power prices in Texas, where Texas Competitive Electric Holdings, the EFH unit that owes much of the debt, sells...
...EFH is expected to say how it will respond to the rules within weeks. Other US utilities have called for a delay to the start date....
...EFH has also protested furiously, saying: “The severe and disproportionate impact on Texas is unjustified and the timeline unreasonable and will harm Texas jobs, prices, and power supply.“ EFH and other...
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