- Sempra Energy 's (NYSE:SRE) deal to purchase power transmission company Oncor includes a promise to pay off up to $3B in debt within seven years, causing some concern among jittery Texas regulators who have rejected two earlier attempted deals, WSJ reports.
- SRE patterned its Oncor takeover after the withdrawn Berkshire Hathaway (NYSE:BRKa) deal with the exception of the debt left over at the parent company; cash-rich BRK had won over the Texas stakeholders by pledging to remove the debt that sits at a corporate layer above Oncor.
- Instead of getting Oncor parent Energy Future out of bankruptcy debt-free, SRE is offering to pay the debt off over a period of years; the $3B debt at issue belongs to Energy Future, not to Oncor, but regulators are concerned that Oncor is the only source of cash to service the debt, according to the WSJ report.
- Oncor executives are expected to meet with commissioners next week to answer questions about the proposed SRE deal.
- Now read: Is Sempra Energy A Good Investment?
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