Energy Future Holdings is still not ready to file its already delayed annual report, the company said in a filing Tuesday with the federal Securities and Exchange Commission.
The decision not to submit the report places the Dallas-based company in breach of agreements with creditors for TXU Energy and Luminant, the largest power generator in Texas, and could be another step towards bankruptcy.
Two weeks ago, Energy Future Holdings skipped a deadline to pay $109 million in interest payments, relying upon a 30-day grace period to avoid a default. Companies have 90 days from the end of the year to file their annual reports. Energy Future asked for a two-week extension on April 1.
The Sierra Club and other environmental watchdogs have said the company's looming bankruptcy could jeopardize nearly $1 billion in mining cleanup funds owed to Texas.
Luminant Mining Co. has been allowed to operate without a reserve fund to restore the heavily mined areas in East Texas where it operates, but Energy Future spokesman Allan Koenig insisted environmental reclamations will be paid, no matter the outcome.
"This is a financial, rather than operational, issue. There is no chance the plants will shut down," Koenig said.
In an April 1 filing, Energy Future said it expects to have the financing to permit Luminant to grant the Texas Railroad Commission a collateral bond equal to or beyond what it owes for the cleanup.
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Still, the Texas Railroad Commission, which regulates the state's oil and gas industries, said this week that it will require Luminant to post real cash bonds to cover future mining operations when and if Energy Future files and emerges from its Chapter 11 bankruptcy protection.
There is no set date for a bankruptcy to commence as negotiations over the company's $45.6 billion debt continue among Energy Future's owners, management and holders, according to Koenig. However, the company could issue a warning about its ability to continue as a going concern or fail to pay interest due by the end of April, either of which would trigger a default.
The company had bet that natural gas prices would rise, giving its coal-fired plants a competitive edge. Instead, natural gas prices have plummeted amid a glut of production from U.S. shale deposits.
Energy Future Holdings was acquired in 2007 by private-equity firms KKR & Co., TPG Capital and Goldman Sachs Capital Partners.
The proposal stakeholders are now discussing aims to reduce the amount of time it takes to restructure, avoiding a chaotic free-for-all and protect stakeholders from a tax liability estimated at as much as $7 billion that could be triggered if the company fails to keep its regulated and deregulated units intact.
