Wednesday, February 8, 2023

Puerto Rico: Attempt to restructure PREPA debt fails

SAN JUAN ( Associated Press) – Efforts to restructure nearly $9 billion in debt at a Puerto Rican power company hit a new stumbling block Thursday after several failed attempts to stave off its bankruptcy.

Officials had until Thursday to submit a new proposal to reduce the debt of the Puerto Rico Electric Power Authority (PREPA) – the largest for a government agency on the island – but a mediation team that is negotiating between bondholders and the government Supervises the seven-day extension.

Federal Judge Laura Taylor-Swain, who is overseeing the case, approved the extension request, saying it was sensible and necessary.

Resolving the power company’s debt is seen as critical to Puerto Rico’s economic development as the island is mired in a deep economic recession and investors have been put off by financial uncertainty and chronic blackouts that are partly caused by wear and tear on infrastructure. responsible for tearing. Due to decades of neglect and mismanagement.

A few months ago, Puerto Rico experienced the largest municipal bankruptcy in US history. The island announced in 2015 that it could not pay its public debt of more than $70,000 million, the product of decades of corruption, mismanagement and requests for larger loans. The power company is the only public body that has not restructured its debt. Many on the island fear the ongoing talks will lead to an increase in already high electricity tariffs to pay creditors.

In a document filed with the court on Thursday, the mediation team said the federal control board that oversees Puerto Rico’s finances and represents the island’s government in the bankruptcy lawsuit submitted data and analysis relevant to the current negotiations on the debt. failed to do. electricity company.

The team said that without that information there was no way to move towards a resolution of consent.

The document states, “Put another way, good faith talks … require transparency from both sides.”

The board said in a statement sent to The Associated Press that it has cooperated and will continue to do so.

The mediation team noted that the board agreed to provide all requested information on Friday and would be available for questions. He said he was reluctant to request an extension, but that forcing the watchdog to submit a restructuring proposal on Thursday would not be conducive to a consensus.

The request came after the federal judge presiding over the case ordered a new round of talks in late September after the control board and bondholders reached an impasse. The judge also asked the watchdog to determine what amount bondholders should receive.

Puerto Rico’s governor, Pedro Pierluisi, announced last March that his government would reject a proposed debt restructuring deal for the electric company he had worked for for years, assuring it was not feasible or in the island’s interests. is in

Nation World News Desk
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