August 1, 2016 - 9:16 AM EDT
Print Email Article Font Down Font Up
Blog Coverage NextEra Extends Energy Future Holdings Lifeline by Buying its Stake in Oncor

LONDON, UK / ACCESSWIRE / August 1, 2016 / Active Wall St. blog coverage looks at the headline from NextEra Energy Inc. (NYSE: NEE) as the company announced on Friday, July 29, 2016, that it has acquired 80% stake of Energy Future Holdings (EFH), formerly known as TXU Corp., in Oncor Electric Delivery Company for $18.4 billion. Register with us now for your free membership and blog access at:

Today, AWS is promoting its blog coverage on NEE; touching on Hawaiian Electric Industries Inc. (NYSE: HE). Get all of our free blog coverage and more by clicking on the link below:

Dallas-based Oncor Electric Delivery Company LLC is the largest electric transmission and distribution service provider with more than 10 million customers across Northeast and West Texas. Oncor's majority investor is Energy Future Holdings Corp. (EFH), a Dallas-based privately held energy company with majority holdings in TXU Energy, Luminant and Oncor Electric Company.

NextEra has come up with this deal having recently failed to acquire Hawaiian Electric Industries Inc. due to objections from the Hawaii's regulatory authorities. NextEra's winning bid put dampers to rival bids placed by Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK-B), Edison International (NYSE: EIX) and Hunt Consolidated and Fidelity Investments, all of whom had shown keen interest in acquiring Oncor's stake. This deal will enable NextEra's to access Oncor's 8.6 million customer accounts, 200,000 miles of power lines and $102 billion in assets.

Points to Ponder

Energy Future Holdings has been entangled in chapter 11 bankruptcy proceedings, which began in April 2014. This deal will help EFH in restructuring its debt of $50 billion. Oncor is one of the most successful companies of EFH. As part of the NextEra–Oncor deal, NextEra will help EFH's pay off its debt of nearly $9.5 billion in a combination of cash and NextEra's stocks. NextEra will also absorb Oncor's debts of $ 6.7 billion reflected in its books after the takeover process is completed.

The plans for debt restructuring by EFH will enable it to emerge from Chapter 11 bankruptcy proceedings. The deal is subject to approvals from bankruptcy court, Texas regulators, the Federal Energy Regulatory Commission, etc.

Pending approvals from the regulators, EFH, in the meanwhile, can lookout for alternative options to fund its debt; however it will have to pay NextEra Energy a $275 million as termination fee if it does so. The deal is expected to be finalized in the first quarter of 2017.

"NextEra Energy's proven track record of providing affordable, reliable electric service for customers complements Oncor's operational strengths, and is at the core of why we believe this transaction will be a significant benefit for Oncor and for Texas," Jim Robo, chairman and CEO of NextEra, said on an investor call.

NextEra has promised to retain the Oncor name, company management as well as keeping Dallas as its headquarters once the deal is final.

Benefits to NextEra all the way

A wave of consolidation is rising in the utility power energy sector recently as companies seek newer avenue for growth given low price of power and flat consumer demand. NextEra, which is the parent company of Florida Power & Light, has emerged as a significant and powerful player in the electric energy space. It has been acquiring units in the un-regulated renewable – energy business thus gaining a large footprint across the US in this sector.

With the Oncor deal NextEra had managed to get a lucrative asset at a cheap price and also a huge opportunity in Texas to enable it to move from coal-based energy production to natural gas and renewable energy sources like solar power. NextEra will also increase its distribution area by 25% simultaneously controlling costs thus benefitting customers in a large way.

Recent Important News from the company

NextEra has earlier announced its quarterly results on July 28, 2016, with earnings of $540 million, or $ 1.16 per share, on revenues of $3.82 billion.

Market reaction

Following the announcement, share price of NextEra rose marginally by 0.68% to end the day at $128.29, at the closing bell last Friday. A total volume of 2.33 million shares was traded. The company's stock has surged 25.33% since the beginning of 2016.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.


The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst for further information on analyst credentials, please email [email protected]. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.


AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.


This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit


For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: [email protected]
Phone number: 1-858-257-3144
Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street

Source: ACCESSWIRE Investor Awareness (August 1, 2016 - 9:16 AM EDT)

News by QuoteMedia

Legal Notice