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Energy Future's generation, retail business emerges from bankruptcy

The parent company of Energy Future Holdings Corp.'s generation and retailbusinesses consummated its reorganization plan Oct. 3 and emerged from Chapter11, according to a federal filing.

EFH subsidiary Texas Competitive Electric Holdings Co. LLC, now knownas TCEH Corp., is the parent company of Luminant Generation Co. LLC, Luminant Energy Co. LLC and .

The emergence of TCEH from bankruptcy is a separatetransaction from the regulated side of EFH, where the company is completion of an$18.7 billiondeal to be acquired, along with its 80% ownership share inOncor Electric Delivery Co.LLC, by NextEraEnergy Inc.

In August, the bankruptcy court approved a plan for EFH's generationand retail businesses, referred to in the proceedings as the"T-side," to be spun off tax free to TCEH's first-lien creditors inexchange for cancellation of their allowed claims against TCEH.

Concurrent with its emergence, the new TCEH Corp. issuedapproximately 427.5 million shares of its common stock to the"pre-emergence" senior creditors of the former TCEH. Beginning Oct.4, this common stock is traded on the OTCQX market under ticker symbol THHH.

In a news release, TCEH said it has eliminated more than $33billion in debt and other obligations through the Chapter 11 bankruptcyprocess. The new company's available liquidity position is estimated at $1.65billion, according to the release, including $750 million of undrawn netborrowings available under the company's $4.25 billion exit financing facility.

Curt Morgan is assuming responsibilities as CEO of TCEHCorp. Most recently, he served as a consultant for the former TCEH's seniorcreditors. Prior to that, according to the news release, he was an operatingpartner at Energy CapitalPartners LLC. "This outcomewould not have been possible without the support of key stakeholders,"Morgan said in a statement. "So while industry conditions remainchallenging — and we must continue to adapt accordingly — the long-termpotential of our integrated business, combining an innovative, customer-focusedretail business with a safe, reliable, cost-effective generation company, isextremely powerful."

TCEH Corp.'s new board ofdirectors consists of Gavin Baiera, Jennifer Box, Jeff Hunter, Michael Liebelson, Cyrus Madon, Curt Morgan and Geoffrey Strong.

Power industry observers andparticipants in the ElectricReliability Council of Texas Inc. market have been waiting to seewhat the next steps will be for TCEH upon exiting bankruptcy. A key question iswhether the newly independent company will opt to retire several large coalplants, including the 1,208-MW Big Brown and the 1,995-MW Monticello, that some analysts have identifiedas no longer economic to run. Other generators may be , and prices improve, if those plants are retired.

During a Sept. 28 investorevent, Brookfield AssetManagement Inc. Senior Managing Partner and CEO James Flatt saidBrookfield will be among the three largest owners of shares in TCEH, but shedlittle light on the direction of the company. "We're quite excitedabout the business and what we may be able to do with the business," Flattsaid, according to a transcript from the event. "I think we'll be thelargest owner of the shares when it emerges from bankruptcy, and we intend touse it as a business to grow with it and assist it."