Puerto Rico’s Electric Power Authority will submit a plan to creditors in the next two months to restore the agency’s finances, its chief restructuring officer said in an interview with Reorg Research.
The proposal from the junk-rated utility, called Prepa, would follow a $2 billion offer last month from its lenders. The creditor plan, which involves building a facility that would burn oil and natural gas, wouldn’t meet environmental standards, Lisa Donahue, the restructuring officer, told Reorg Research in an article published April 8.
“Most of the people in the room are interested in a transformed, revitalized Prepa,” Donahue told the publication, which covers distressed debt and restructuring. “We wish it could be faster, but as the company, we get one chance to do this right.”
Prepa, banks, bondholders and insurance companies entered into an agreement in August that extended loans and gave the utility time to develop a turnaround plan. That contract ends April 15.
Jose Echevarria, a Prepa spokesman, didn’t immediately respond to an e-mail requesting comment on Donahue’s remarks.
Puerto Rico, whose bonds are tax-exempt nationwide, has struggled under $73 billion in debt issued by the commonwealth and its agencies. The securities have traded at distressed levels for more than a year on concern that the island won’t be able to repay its obligations.