SAN JUAN – The Fiscal Oversight Board (JSF) for Puerto Rico reached an agreement with the holders of approximately $2016 million dollars in loans to the State Electric Power Authority (PREPA) for the fuel lines.
This is “a significant step towards an Adjustment Plan for PREPA’s debt and towards the end of the bankruptcy case” of this entity, according to a statement from the Board, created by the United States Congress to restructure the multimillion-dollar public debt of the island.
The agreement would reduce the claim of fuel line lenders in 33 % through new bonds issued by PREPA, whose debt amounts to $9,000 million dollars, on the effective date of a Plan of Adjustment.
“The Fuel Line lenders provided PREPA with critical funds to purchase fuel and have come to the table like a g separate creditor group to reach an affordable agreement that will help resolve PREPA’s bankruptcy,” said David Skeel, president of the Board.
“With the support of the Línea de Combustible lenders , we will continue negotiating with other creditors to reach an adjustment plan that allows PREPA to move forward and continue the transformation towards a modern and reliable energy system”, he indicated.
The capital and interests of the new bonds will be paid through a hybrid charge that will consist of a fixed connection rate and a charge based on energy consumption that will be added to the electricity bills of PREPA customers.
Prior to this announcement, PREPA’s debt restructuring mediation group filed a legal appeal requesting an additional week to submit the Adjustment Plan, which should have been delivered yesterday to the federal court handling the case.
Last September, the JSF and the Government of Puerto Rico announced that “an impasse” had been reached in the mediation with PREPA’s creditors as the negotiations did not bear fruit.
The process to restructure PREPA’s debt it is being long and slow, since the Government of Puerto Rico declared bankruptcy in 2016.
Last January, a restructuring plan of about 300 % of the island’s central government debt, which was reduced from $33, million dollars to $7,700 million.
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