Energy Future postpones hearing on restructuring agreement

By Tom Hals

WILMINGTON, Del, June 6 Fri Jun 6, 2014 12:02pm EDT

WILMINGTON, Del, June 6 (Reuters) - A lawyer for Energy Future Holdings, the bankrupt Texas power company, told a judge on Friday the company will postpone for a second time a hearing to approve an agreement that is key to its ambitious timeline to exit bankruptcy in 11 months.

The restructuring support agreement, or RSA, allows the company, Texas's largest power provider, to pay professionals and helps to hold its creditors to a process for restructuring its $42 billion in debt.

While the RSA hearing set for June 30 was postponed, U.S. Bankruptcy Court Judge Christopher Sontchi in Wilmington, Delaware, also barred an effort by junior creditors to use the RSA hearing to make their case that the company could afford to pay them more.

Energy Future filed one of the largest U.S. bankruptcies in April after a year of negotiations with creditors.

The company took on much of the debt in 2007, when it was formed with the record buyout of TXU Corp, led by KKR & Co , TPG Capital Management and the private equity arm of Goldman Sachs. The deal turned out to be an ill-timed bet on natural gas prices, which soon began to plummet.

The RSA outlines the company's plan to spin off its TCEH business, which owns Luminant power plants and the utility TXU Energy, to the unit's senior creditors, which are owed $24.4 billion.

The plan is opposed by junior creditors, who are owed $7.7 billion by TCEH. Under the plan, they will have to share about $200 million, or less than 3 cents on the dollar. Sontchi rejected their effort to use the RSA hearing to try to prove TCEH is being undervalued and they can get paid more.

Edward Sassower, a lawyer from the firm of Kirkland & Ellis who is representing Energy Future, said the company would postpone the RSA hearing to July 18 from June 30 because it could not comply with a June 20 deadline set by Judge Sontchi for disclosures, known as schedules.

"The debtors do not have confidence that we can file the schedules without errors by June 20," said Sassower. He said the company would seek the consent of the creditors and lenders that had signed on to the RSA to move the hearing to July 18.

Last month, the company postponed the RSA hearing to June 30 from early June.

While senior creditors will gain ownership of TCEH, less than half support the RSA plan, and they have been bickering over how to divvy up what they get under the proposal.

A lawyer for the junior creditors compared the bankruptcy to the differing classes on a flight.

"People in the front of the plane are arguing over caviar or lobster and will it be apportioned by row number or seat number," Chris Shore, of White & Case, told Sontchi, while his clients in coach hope "to get chips at some point."

The RSA also anticipates that unsecured creditors of EFIH, the other big part of Energy Future's business that controls the Oncor power line business, will take control of that unit when it emerges from bankruptcy.

Later Friday, Sontchi will be asked to approve a $5.4 billion loan that will be used to refinance senior creditors of EFIH. (Reporting by Tom Hals in Wilmington, Delaware; Editing by Jeffrey Benkoe)

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UPDATE 1-Bankrupt Energy Future cleared for $5.4 bln refinancing loan

Fri Jun 6, 2014 5:29pm EDT

(New throughout, adds court approval for $5.4 billion borrowing, details of plan)

By Tom Hals

WILMINGTON, Del, June 6 (Reuters) - Bankrupt Energy Future Holdings, Texas's largest power company, received court approval on Friday for one of its main businesses to borrow $5.4 billion to carry out a refinancing that is key to its huge restructuring.

Approval of the loan to Energy Future's EFIH unit, which controls the Oncor power lines business, was tied to a settlement offer that was also approved on Friday by U.S. Bankruptcy Judge Christopher Sontchi in Wilmington, Delaware.

In April, Energy Future filed one of the largest U.S. bankruptcies after a year of negotiations with creditors. The company is working on a restructuring plan to slash its $42 billion in debt.

Under that plan, the EFIH unit would use the $5.4 billion to refinance some senior debt to lower its interest payments.

Some senior creditors opposed the refinancing, saying it favored some parties such as investment funds in order to buy their support. But Sontchi rejected that contention.

"I'm not going to hold something against Pimco and Fidelity for reaching a deal sooner than others," said Sontchi. He said the investment management firms were treated better because they also provided some of the $5.4 billion loan.

The ruling did not resolve a dispute over whether senior creditors must be paid an early redemption payment, known as a make-whole. A trial on that dispute is scheduled for September.

Energy Future took on much of its debt in 2007, when it was formed with the record buyout of TXU Corp, led by KKR & Co , TPG Capital Management and the private equity arm of Goldman Sachs. The deal turned out to be an ill-timed bet on natural gas prices, which soon began to plummet.

Some creditors have argued Energy Future's restructuring is two separate bankruptcies because the company is being split.

Energy Future anticipates bringing its EFIH unit out of bankruptcy under the control of that unit's unsecured creditors.

The company also anticipates spinning off its TCEH business to senior creditors, which are owed $24.4 billion. The TCEH unit owns Luminant power plants and the utility TXU Energy.

TCEH's junior creditors oppose the spin-off plan because it will leave them with only about $200 million of the $7.7 billion they are owed, or less than 3 cents on the dollar.

Earlier on Friday, the company said it will postpone until July 18 a hearing to seek permission to enter into a restructuring support agreement. The RSA allows the company to pay professionals and helps to hold its creditors to the restructuring process and timeline.

The company will still need to seek a traditional vote of creditors. (Reporting by Tom Hals in Wilmington, Delaware; Editing by Jeffrey Benkoe and David Gregorio)

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INSIGHT-Detroit rolls dice by relying on casino cash

By Tim Reid and Michael Erman

DETROIT/NEW YORK June 8 Sun Jun 8, 2014 7:00am EDT

DETROIT/NEW YORK June 8 (Reuters) - Detroit's reliance on casino cash to help fund a recovery from the city's historic bankruptcy is a high-risk bet on what is an increasingly shaky source of income.

A trial to approve Detroit's plan to exit its $18 billion bankruptcy, the largest municipal crash in U.S. history, begins in late July. Flawed revenue projections may undermine its feasibility, creating a key legal hurdle to win approval by the court. On a practical level, a revenue shortfall could knock the city down just as it is getting back on its feet.

Detroit Emergency Manager Kevyn Orr projects that wagering tax revenue from three local casinos, the city's third largest source of cash, will remain essentially steady as far ahead as 2023.

Orr has described the gambling taxes as Detroit's most stable source of money. But casino revenue has declined of late in Detroit itself and in recent years traditional gambling hubs like Nevada and New Jersey as well as relative newcomers to the wagering scene, such as neighboring Ohio, have seen swoons.

"Projecting casino revenue is notoriously difficult," Moody's Investors Service casino analyst Keith Foley said. "But nobody is saying it is going to get better."

For instance, casino revenue from Atlantic City has roughly halved since 2007, a drop no one saw coming, Foley said. Total U.S. casino revenue in 2012 was still just shy of a 10-year peak of $37.5 billion set in 2007, according to the American Gaming Association.

A litany of factors stack up against Orr's forecast, industry analysts and experts say: younger people show little interest in gambling, the casino market is saturated, and thousands of local residents are likely to see their wages drop due to the bankruptcy plan.

Bill Nowling, a spokesman for Orr, says the casino tax projection is conservative and was calculated by Detroit's financial restructuring advisors, Ernst & Young. He said the calculations were also based on anticipated Michigan unemployment rates "continuing to improve and inflation to hold at or below 1 percent annually."

He declined to elaborate on projections but said if they were too high, Detroit "will live within its means and will match spending with available revenue."

The casino revenue has already been the subject of legal wrangling in the bankruptcy. In April, the bankruptcy judge approved a deal brokered by Orr that kept the casino revenue from being diverted to two creditor banks.

THE RISK OF A DROP

In fiscal year 2013, casino taxes brought in $174.6 million, down 3.7 percent from $181.4 million the year before, according to Orr's latest plan of adjustment filed in May. That was nearly 17 percent of Detroit's general fund revenues, with only income taxes and state funds larger revenue sources.

Orr's plan predicts it will continue to drop to just over $168 million in 2015, then recover to its 2012 level by 2023, at a growth rate of 1 percent a year from 2016 until 2023.

But just a 1 percent annual downturn in wagering taxes after 2016 would lead to a more than $25 million shortfall in 2023 alone, according to calculations by Reuters.

Overall, revenue at the three casinos fell 4.75 percent in 2013. The decline has continued so far this year, with revenue over the first four months falling more than 6 percent from a year earlier.

"Obviously they are going to have to justify this projection at trial," said Richard Larkin, director of credit analysis at investment bank HJ Sims. "Casino revenue is not a traditional, long-term revenue source."

A flaw in projecting casino revenue "could signal far deeper problems with city's plan of adjustment and the city's intended plans for recovery," said Peter Hammer, a law professor at Detroit's Wayne State University.

"It decreases substantially the confidence you have about the viability of the rest of the plan, which involves much more complicated issues," Hammer said.

Moody's Foley has a similar concern about the casinos: "What if Detroit has another 5 percent decline next year? Then their budget is already way off track."

After all, Detroit is not alone in seeing a fall off in casino revenue. It is down in Illinois, Indiana, Iowa, Nevada, Pennsylvania, Missouri, Connecticut, Atlantic City and Ohio in the past two years, according to figures from each state.

TEMPORARY OR LONG-TERM DECLINE?

Analysts and backers of Orr's projections say there are factors that might mitigate a slide in Detroit's casino revenue, compared to other areas. State law allows only three gambling houses in the city, a cushion against more competition. The city is the most convenient gambling center for southeast Michigan, northeastern Indiana and northwest Ohio.

Jennifer Kulczycki, a spokeswoman for the company that owns one of the city's casinos, Greektown, said that while revenue had softened, "we are optimistic for things to return to previous levels - and then some. The Detroit market is 14 years old and it has been very resistant."

A central issue is whether these declines are temporary or permanent.

In an April report, Moody's Foley warned that Detroit's bankruptcy threatens a reduction in gambling spending because city employees face lower pensions and retiree health benefits under Orr's restructuring plan. The city is Detroit's second biggest employer, according to Crain's Detroit Business.

Demographics are also a worry, said Alex Calderone, a business turnaround specialist based in Michigan, who was part of the team that took the city's Greektown Casino-Hotel through bankruptcy between 2008 and 2010. Greektown is up and running under a new owner - Dan Gilbert, the founder and CEO of Quicken Loans, who is investing heavily in downtown Detroit.

Standing in the casino, surrounded by the cacophony of slot machines and clouds of cigarette smoke, Calderone asked: "Where are the young people?" There is no replacement for the predominately older age group who gamble, he said.

"Young people have little inclination to play slot machines," according to a recent analysis by Deutsche Bank. It cited research by the Meczka consulting group, which said only 18 percent of people aged between 21 and 35 visit casinos.

IN AN URBAN DESERT

Experts also look to Las Vegas as a leading indicator in gambling behavior. According to the Center for Business and Economic Research at the University of Nevada, more people now visit the Vegas strip to eat and go night clubbing than gamble.

But Detroit is not Vegas. Casino-hotels on the Vegas strip such as Caesar's Palace and Wynn Las Vegas have spectacular nightly shows, and high-end bars, restaurants and shops. Moreover, Detroit's casino tax is based on gambling revenue alone.

While Detroit's biggest casino, MGM Grand Detroit, part of MGM Resorts International, would not look out of place among the glass and marble casinos of the Vegas strip, it and the nearby MotorCity sit in a virtual urban desert. Their surroundings are bleak - a far cry from glitzy - and perpetually warm - Las Vegas.

Last year revenues fell 6.3 percent at the MGM and 1.2 percent at MotorCity, and have continued to drop this year. Greektown's revenue fell more: from $352.1 million to $328.3 million, or 6.8 percent.

In contrast to its larger two rivals, Greektown is in need of a makeover. Its carpets are old, its facilities drab.

But plans for a full face lift have been scaled back. According to a February filing with the Securities and Exchange Commission, Gilbert's company that owns Greektown, Athens Acquisitions LLC, said a planned $150 million renovation had been cut back to a $25 million to $50 million refurbishment.

"In a casino that's basically just changing the carpet," said Ken Adams, a gaming consultant. (Reporting by Tim Reid; Editing by Dan Burns and Peter Henderson)

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Bank of Ireland beefs up capital buffers, AIB up next?

Fri Jun 6, 2014 11:26am EDT

* ECB rally, hunt for yield create ideal selling environment

* State-owned AIB faces deep legacy issues

By Aimee Donnellan

LONDON, June 6 (IFR) - Bank of Ireland unearthed over 5bn of demand for the country's first subordinated bond transaction since December 2012, a result that could open a similar path for country peer AIB to follow suit.

On Wednesday, Bank of Ireland, the only Irish lender to escape nationalisation during the crisis, priced a 750m 10-year non-call five issue with a coupon of 4.25%, less than half what it paid for a 10-year bullet 18 months ago.

With such a strong demand for an attractively priced deal, bankers now say they are encouraging AIB to pull the trigger on what could be the next hot deal from Ireland as it recovers from the banking and sovereign crisis.

"AIB has a more difficult credit profile than Bank of Ireland but it is the next logical step for the country," said a syndicate banker.

The timing for AIB could prove ideal after the ECB boosted market sentiment by rolling out sub-zero interest rates and other stimulus measures. The risk rally has driven the cost of insuring subordinated debt down by 10bp to 94bp - its lowest level since the beginning of 2008.

Furthermore, investors are willingly accepting far tighter spreads from credits they had previously snubbed, as Delta Lloyd discovered on Friday morning. The Dutch insurer received orders of 5.7bn for a 750m subordinated deal, when less than two years ago it struggled to place a 500m deal offering investors more than double the coupon it paid today.

But despite the bull market, AIB could face more difficult execution - not least because it cost taxpayers more than 20bn to bail out, the most given to any lender that survived Ireland's crisis. Since then it has been struggling with deep legacy issues with non-performing mortgages.

AIB's proportion of owner-occupiers in arrears for more than 90 days stood at 11.1% at the end of December, while almost a quarter of all buy-to-let mortgage holders were behind on payments for the same timespan.

In contrast to BoI, which has issued right across the capital structure, AIB has only sold senior and covered bonds, and is yet to turn its preference shares into equity or remarket state-owned contingent capital notes.

Subordinated bondholders would be first in the firing line if AIB was to run into trouble again.

But with spreads set to tighten in the coming months, investors are expected to embrace the latest chapter in Ireland's recovery story, and the yield on a high risk bond from AIB may prove too good to pass up.

"Bank of Ireland shows that anything with a bit of spread is just flying out the door these days," said another syndicate banker.

"Conditions are pretty good and the appetite for Tier 2 debt has been really strong," said a syndicate official involved in the Bank of Ireland exercise. (Reporting by Aimee Donnellan; Editing by Alex Chambers and Julian Baker)

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Energy Future postpones hearing on restructuring agreement

By Tom Hals

WILMINGTON, Del, June 6 Fri Jun 6, 2014 12:02pm EDT

WILMINGTON, Del, June 6 (Reuters) - A lawyer for Energy Future Holdings, the bankrupt Texas power company, told a judge on Friday the company will postpone for a second time a hearing to approve an agreement that is key to its ambitious timeline to exit bankruptcy in 11 months.

The restructuring support agreement, or RSA, allows the company, Texas's largest power provider, to pay professionals and helps to hold its creditors to a process for restructuring its $42 billion in debt.

While the RSA hearing set for June 30 was postponed, U.S. Bankruptcy Court Judge Christopher Sontchi in Wilmington, Delaware, also barred an effort by junior creditors to use the RSA hearing to make their case that the company could afford to pay them more.

Energy Future filed one of the largest U.S. bankruptcies in April after a year of negotiations with creditors.

The company took on much of the debt in 2007, when it was formed with the record buyout of TXU Corp, led by KKR & Co , TPG Capital Management and the private equity arm of Goldman Sachs. The deal turned out to be an ill-timed bet on natural gas prices, which soon began to plummet.

The RSA outlines the company's plan to spin off its TCEH business, which owns Luminant power plants and the utility TXU Energy, to the unit's senior creditors, which are owed $24.4 billion.

The plan is opposed by junior creditors, who are owed $7.7 billion by TCEH. Under the plan, they will have to share about $200 million, or less than 3 cents on the dollar. Sontchi rejected their effort to use the RSA hearing to try to prove TCEH is being undervalued and they can get paid more.

Edward Sassower, a lawyer from the firm of Kirkland & Ellis who is representing Energy Future, said the company would postpone the RSA hearing to July 18 from June 30 because it could not comply with a June 20 deadline set by Judge Sontchi for disclosures, known as schedules.

"The debtors do not have confidence that we can file the schedules without errors by June 20," said Sassower. He said the company would seek the consent of the creditors and lenders that had signed on to the RSA to move the hearing to July 18.

Last month, the company postponed the RSA hearing to June 30 from early June.

While senior creditors will gain ownership of TCEH, less than half support the RSA plan, and they have been bickering over how to divvy up what they get under the proposal.

A lawyer for the junior creditors compared the bankruptcy to the differing classes on a flight.

"People in the front of the plane are arguing over caviar or lobster and will it be apportioned by row number or seat number," Chris Shore, of White & Case, told Sontchi, while his clients in coach hope "to get chips at some point."

The RSA also anticipates that unsecured creditors of EFIH, the other big part of Energy Future's business that controls the Oncor power line business, will take control of that unit when it emerges from bankruptcy.

Later Friday, Sontchi will be asked to approve a $5.4 billion loan that will be used to refinance senior creditors of EFIH. (Reporting by Tom Hals in Wilmington, Delaware; Editing by Jeffrey Benkoe)

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UPDATE 1-Bankrupt Energy Future cleared for $5.4 bln refinancing loan

Fri Jun 6, 2014 5:29pm EDT

(New throughout, adds court approval for $5.4 billion borrowing, details of plan)

By Tom Hals

WILMINGTON, Del, June 6 (Reuters) - Bankrupt Energy Future Holdings, Texas's largest power company, received court approval on Friday for one of its main businesses to borrow $5.4 billion to carry out a refinancing that is key to its huge restructuring.

Approval of the loan to Energy Future's EFIH unit, which controls the Oncor power lines business, was tied to a settlement offer that was also approved on Friday by U.S. Bankruptcy Judge Christopher Sontchi in Wilmington, Delaware.

In April, Energy Future filed one of the largest U.S. bankruptcies after a year of negotiations with creditors. The company is working on a restructuring plan to slash its $42 billion in debt.

Under that plan, the EFIH unit would use the $5.4 billion to refinance some senior debt to lower its interest payments.

Some senior creditors opposed the refinancing, saying it favored some parties such as investment funds in order to buy their support. But Sontchi rejected that contention.

"I'm not going to hold something against Pimco and Fidelity for reaching a deal sooner than others," said Sontchi. He said the investment management firms were treated better because they also provided some of the $5.4 billion loan.

The ruling did not resolve a dispute over whether senior creditors must be paid an early redemption payment, known as a make-whole. A trial on that dispute is scheduled for September.

Energy Future took on much of its debt in 2007, when it was formed with the record buyout of TXU Corp, led by KKR & Co , TPG Capital Management and the private equity arm of Goldman Sachs. The deal turned out to be an ill-timed bet on natural gas prices, which soon began to plummet.

Some creditors have argued Energy Future's restructuring is two separate bankruptcies because the company is being split.

Energy Future anticipates bringing its EFIH unit out of bankruptcy under the control of that unit's unsecured creditors.

The company also anticipates spinning off its TCEH business to senior creditors, which are owed $24.4 billion. The TCEH unit owns Luminant power plants and the utility TXU Energy.

TCEH's junior creditors oppose the spin-off plan because it will leave them with only about $200 million of the $7.7 billion they are owed, or less than 3 cents on the dollar.

Earlier on Friday, the company said it will postpone until July 18 a hearing to seek permission to enter into a restructuring support agreement. The RSA allows the company to pay professionals and helps to hold its creditors to the restructuring process and timeline.

The company will still need to seek a traditional vote of creditors. (Reporting by Tom Hals in Wilmington, Delaware; Editing by Jeffrey Benkoe and David Gregorio)

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Bank of Ireland beefs up capital buffers, AIB up next?

Fri Jun 6, 2014 11:26am EDT

* ECB rally, hunt for yield create ideal selling environment

* State-owned AIB faces deep legacy issues

By Aimee Donnellan

LONDON, June 6 (IFR) - Bank of Ireland unearthed over 5bn of demand for the country's first subordinated bond transaction since December 2012, a result that could open a similar path for country peer AIB to follow suit.

On Wednesday, Bank of Ireland, the only Irish lender to escape nationalisation during the crisis, priced a 750m 10-year non-call five issue with a coupon of 4.25%, less than half what it paid for a 10-year bullet 18 months ago.

With such a strong demand for an attractively priced deal, bankers now say they are encouraging AIB to pull the trigger on what could be the next hot deal from Ireland as it recovers from the banking and sovereign crisis.

"AIB has a more difficult credit profile than Bank of Ireland but it is the next logical step for the country," said a syndicate banker.

The timing for AIB could prove ideal after the ECB boosted market sentiment by rolling out sub-zero interest rates and other stimulus measures. The risk rally has driven the cost of insuring subordinated debt down by 10bp to 94bp - its lowest level since the beginning of 2008.

Furthermore, investors are willingly accepting far tighter spreads from credits they had previously snubbed, as Delta Lloyd discovered on Friday morning. The Dutch insurer received orders of 5.7bn for a 750m subordinated deal, when less than two years ago it struggled to place a 500m deal offering investors more than double the coupon it paid today.

But despite the bull market, AIB could face more difficult execution - not least because it cost taxpayers more than 20bn to bail out, the most given to any lender that survived Ireland's crisis. Since then it has been struggling with deep legacy issues with non-performing mortgages.

AIB's proportion of owner-occupiers in arrears for more than 90 days stood at 11.1% at the end of December, while almost a quarter of all buy-to-let mortgage holders were behind on payments for the same timespan.

In contrast to BoI, which has issued right across the capital structure, AIB has only sold senior and covered bonds, and is yet to turn its preference shares into equity or remarket state-owned contingent capital notes.

Subordinated bondholders would be first in the firing line if AIB was to run into trouble again.

But with spreads set to tighten in the coming months, investors are expected to embrace the latest chapter in Ireland's recovery story, and the yield on a high risk bond from AIB may prove too good to pass up.

"Bank of Ireland shows that anything with a bit of spread is just flying out the door these days," said another syndicate banker.

"Conditions are pretty good and the appetite for Tier 2 debt has been really strong," said a syndicate official involved in the Bank of Ireland exercise. (Reporting by Aimee Donnellan; Editing by Alex Chambers and Julian Baker)

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Energy Future postpones hearing on restructuring agreement

By Tom Hals

WILMINGTON, Del, June 6 Fri Jun 6, 2014 12:02pm EDT

WILMINGTON, Del, June 6 (Reuters) - A lawyer for Energy Future Holdings, the bankrupt Texas power company, told a judge on Friday the company will postpone for a second time a hearing to approve an agreement that is key to its ambitious timeline to exit bankruptcy in 11 months.

The restructuring support agreement, or RSA, allows the company, Texas's largest power provider, to pay professionals and helps to hold its creditors to a process for restructuring its $42 billion in debt.

While the RSA hearing set for June 30 was postponed, U.S. Bankruptcy Court Judge Christopher Sontchi in Wilmington, Delaware, also barred an effort by junior creditors to use the RSA hearing to make their case that the company could afford to pay them more.

Energy Future filed one of the largest U.S. bankruptcies in April after a year of negotiations with creditors.

The company took on much of the debt in 2007, when it was formed with the record buyout of TXU Corp, led by KKR & Co , TPG Capital Management and the private equity arm of Goldman Sachs. The deal turned out to be an ill-timed bet on natural gas prices, which soon began to plummet.

The RSA outlines the company's plan to spin off its TCEH business, which owns Luminant power plants and the utility TXU Energy, to the unit's senior creditors, which are owed $24.4 billion.

The plan is opposed by junior creditors, who are owed $7.7 billion by TCEH. Under the plan, they will have to share about $200 million, or less than 3 cents on the dollar. Sontchi rejected their effort to use the RSA hearing to try to prove TCEH is being undervalued and they can get paid more.

Edward Sassower, a lawyer from the firm of Kirkland & Ellis who is representing Energy Future, said the company would postpone the RSA hearing to July 18 from June 30 because it could not comply with a June 20 deadline set by Judge Sontchi for disclosures, known as schedules.

"The debtors do not have confidence that we can file the schedules without errors by June 20," said Sassower. He said the company would seek the consent of the creditors and lenders that had signed on to the RSA to move the hearing to July 18.

Last month, the company postponed the RSA hearing to June 30 from early June.

While senior creditors will gain ownership of TCEH, less than half support the RSA plan, and they have been bickering over how to divvy up what they get under the proposal.

A lawyer for the junior creditors compared the bankruptcy to the differing classes on a flight.

"People in the front of the plane are arguing over caviar or lobster and will it be apportioned by row number or seat number," Chris Shore, of White & Case, told Sontchi, while his clients in coach hope "to get chips at some point."

The RSA also anticipates that unsecured creditors of EFIH, the other big part of Energy Future's business that controls the Oncor power line business, will take control of that unit when it emerges from bankruptcy.

Later Friday, Sontchi will be asked to approve a $5.4 billion loan that will be used to refinance senior creditors of EFIH. (Reporting by Tom Hals in Wilmington, Delaware; Editing by Jeffrey Benkoe)

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UPDATE 1-Bankrupt Energy Future cleared for $5.4 bln refinancing loan

Fri Jun 6, 2014 5:29pm EDT

(New throughout, adds court approval for $5.4 billion borrowing, details of plan)

By Tom Hals

WILMINGTON, Del, June 6 (Reuters) - Bankrupt Energy Future Holdings, Texas's largest power company, received court approval on Friday for one of its main businesses to borrow $5.4 billion to carry out a refinancing that is key to its huge restructuring.

Approval of the loan to Energy Future's EFIH unit, which controls the Oncor power lines business, was tied to a settlement offer that was also approved on Friday by U.S. Bankruptcy Judge Christopher Sontchi in Wilmington, Delaware.

In April, Energy Future filed one of the largest U.S. bankruptcies after a year of negotiations with creditors. The company is working on a restructuring plan to slash its $42 billion in debt.

Under that plan, the EFIH unit would use the $5.4 billion to refinance some senior debt to lower its interest payments.

Some senior creditors opposed the refinancing, saying it favored some parties such as investment funds in order to buy their support. But Sontchi rejected that contention.

"I'm not going to hold something against Pimco and Fidelity for reaching a deal sooner than others," said Sontchi. He said the investment management firms were treated better because they also provided some of the $5.4 billion loan.

The ruling did not resolve a dispute over whether senior creditors must be paid an early redemption payment, known as a make-whole. A trial on that dispute is scheduled for September.

Energy Future took on much of its debt in 2007, when it was formed with the record buyout of TXU Corp, led by KKR & Co , TPG Capital Management and the private equity arm of Goldman Sachs. The deal turned out to be an ill-timed bet on natural gas prices, which soon began to plummet.

Some creditors have argued Energy Future's restructuring is two separate bankruptcies because the company is being split.

Energy Future anticipates bringing its EFIH unit out of bankruptcy under the control of that unit's unsecured creditors.

The company also anticipates spinning off its TCEH business to senior creditors, which are owed $24.4 billion. The TCEH unit owns Luminant power plants and the utility TXU Energy.

TCEH's junior creditors oppose the spin-off plan because it will leave them with only about $200 million of the $7.7 billion they are owed, or less than 3 cents on the dollar.

Earlier on Friday, the company said it will postpone until July 18 a hearing to seek permission to enter into a restructuring support agreement. The RSA allows the company to pay professionals and helps to hold its creditors to the restructuring process and timeline.

The company will still need to seek a traditional vote of creditors. (Reporting by Tom Hals in Wilmington, Delaware; Editing by Jeffrey Benkoe and David Gregorio)

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Buyer found for troubled NZ retailer Postie Plus

WELLINGTON, June 4 Tue Jun 3, 2014 11:59pm EDT

WELLINGTON, June 4 (Reuters) - The administrators of troubled New Zealand clothing retailer Postie Plus Group Ltd said on Wednesday they have found a likely buyer for the company.

The struggling company called in administrators from PricewaterhouseCoopers on Tuesday after its bank refused to back the retail chain which has been racking up losses and losing market share for the past two years.

The company's 82 shops were open for business as usual, but Postie Plus shares have been suspended from trading on the NZ stock exchange pending clarification of its future. The stock last traded at 7.3 NZ cents a share, valuing the company at NZ$2.9 million ($2.45 million).

An unnamed international retail group has agreed to buy Postie Plus as a going concern subject to due diligence, which is expected to take about a month.

"This 'going concern sale' of the Postie Plus business is in the best interests of the company's stakeholders, including its secured creditors, trade suppliers and other creditors, landlords as well as the company's more than 600 staff," the administrators said in a statement.

The company said in April it had bank debt of NZ$12.1 million, with total liabilities of NZ$24.7 million and assets worth NZ$29.6 million.

($1 = 1.1860 New Zealand dollars) (Reporting by Gyles Beckford; Editing by Matt Driskill)

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