The new colour of money
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"It’s a landmark deal that drew a line in the sand. That a bank was prepared to walk away from a deal shows that broader factors can matter in financial markets. And TXU shows that climate change matters to the utility sector. I hope this is not lost in a short-term story about the repricing of risk" |
One thing is clear: as a result of the world’s largest ever leveraged buyout, one of the world’s biggest utilities radically changed its business strategy to make it more environment-friendly. Instead of a plan to build 11 new coal-fired plants in the energy-hungry state of Texas, TXU will now build only three.
How this came to pass depends on who you speak to. One banker close to the company says its management should take the credit. "TXU had developed its plan for 11 plants over many years," he says. "But the debate about climate change during that time had moved on dramatically. A leveraged buyout was the only way to remove the company from its original strategy, away from the spotlight of a public listing."