The judge overseeing the bankruptcy of Puerto Rico’s power utility granted it an additional week — for the second time in the past 10 days — to reach a deal with bondholders as talks are progressing.
(Bloomberg) — The judge overseeing the bankruptcy of Puerto Rico’s power utility granted it an additional week — for the second time in the past 10 days — to reach a deal with bondholders as talks are progressing.
The island’s federally appointed financial oversight board, which is managing the utility’s bankruptcy, sought more time to negotiate with bondholders as it anticipates reaching an agreement with at least one creditor, a lawyer for the board said in a court document filed Thursday.
US District Court Judge Laura Taylor Swain agreed to the board’s request to push out the deadline to file an amended debt-restructuring proposal to Aug. 11. The board had made a similar request last week, and had been allowed to postpone an original July 28 deadline to Aug. 4.
The board “continues to believe the prospects of at least one major settlement is high and possibly two major settlements are sufficient to avoid filing an amended plan this week,” a lawyer for the board wrote in the request for more time.
The Puerto Rico Electric Power Authority, called Prepa, has been in bankruptcy for six years and is seeking to reduce nearly $9 billion, the commonwealth’s last remaining sizable debt restructuring. Resolving the utility’s obligations will help stabilize electricity costs on the island and allow officials to focus on modernizing its power grid.
Negotiations between the board and Prepa’s bondholders increased after Swain in June capped at $2.38 billion the amount of utility net revenue that bondholders have a claim to.
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