Investment in TXU Not Paying Off for Investors

DALLAS (AP) _ Private equity investors who bought Dallas-based electric utility TXU Corp. five years ago now see the company worth less than the $45 billion they paid and mired in debt.

The Dallas Morning News reports the company now called Energy Future Holdings, nevertheless, is paying multimillion-dollar retention bonuses to executives and cash payments to private equity holders.

Warren Buffett recently apologized to Berkshire Hathaway shareholders for spending about $2 billion on EFH bonds, which are now worth about $878 million, and conceded even that could be wiped out. Private equity firm KKR has written down its EFH investment’s value by 95 percent.

Experts say the company and its investors were ambushed by plummeting natural gas prices and the effects on wholesale electric power prices.

(Copyright 2012 by The Associated Press.  All Rights Reserved.)

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