Puerto Rico board submits third plan in attempt to restructure power company debt of US$10 billion
SAN JUAN, Puerto Rico –
A brand new plan for restructuring US$10 billion in debt owed by Puerto Rico’s energy firm was filed late Friday within the newest try to finish a prolonged chapter course of marked by acrimonious negotiations.
The plan filed by a federal management board that oversees the U.S. territory’s funds would minimize the debt of Puerto Rico’s Electric Power Authority by practically 80 per cent to some US$2.5 billion.
“We hope that we will be closing not just the chapter but most of the book on the largest public sector bankruptcy in the United States,” Robert Mujica, the board’s government director, stated in a gathering with reporters.
If confirmed by a federal chapter decide, the plan would imply a rise in already excessive energy payments for many individuals on the island if the brand new cost is permitted by Puerto Rico’s Energy Bureau.
On common, residential payments would enhance by practically US$9 a month and industrial payments by US$35.
Some 1.4 million clients wouldn’t pay the brand new cost in the event that they devour lower than 425 kilowatt-hours a month, the plan states. The common month-to-month energy consumption for a U.S. residential buyer is about 886 kilowatt-hours, in keeping with the U.S. Energy Information Administration.
Recent electrical invoice will increase have been criticized by many on the island of three.2 million individuals hit by energy outages ever because the grid was razed by Hurricane Maria in 2017, with crews solely not too long ago beginning to rebuild it.
The latest debt restructuring plan is backed by corporations that maintain greater than 40 per cent of uninsured bonds issued by Puerto Rico’s Electric Power Authority, in keeping with the board. Those corporations agreed to purchase new bonds issued by the facility authority, which might then use that cash to pay some collectors in money.
Friday’s submitting comes greater than eight years after Puerto Rico introduced that it was unable to pay its greater than US$70 billion public debt, which was collected by means of many years of corruption, mismanagement and extreme borrowing.
In 2017, it filed for the largest municipal chapter in U.S. historical past. Since then, a lot of the debt owed by Puerto Rico’s authorities businesses has been restructured, besides that of the facility firm, with efforts stalled amid tense and drawn-out negotiations.
The debt restructuring plan filed Friday is the third such plan and comes after a federal decide earlier lowered bondholders’ claims.
“Nobody wins if (the power company) remains financially unstable,” board chairman David Skeel stated through the assembly with reporters.
Last week, former board member Justin Peterson, who was appointed by then President Donald Trump, introduced he was resigning as a result of he didn’t help a restructuring deal that he stated was “unfair, coercive and discriminatory.”
He accused the board of “essentially wiping out bondholders while keeping pensions fully intact. This is wrong.”
Skeel stated the plan could possibly be confirmed in January, however there are challenges from those that oppose the most recent plan.
