The proposal filed in the United States District Court on the island proposes to reduce PREPA’s unsustainable debt by 48 percent, to approximately $5,400 million, and should provide the financial stability needed to invest in a modern, resilient system and reliable energy source.
“Bankruptcy has halted the transformation of Puerto Rico’s energy system (and) the plan we have presented represents a huge step forward, but not the last; said Chairman, David Schell.
He explained that every member of the oversight board is fully aware that residents and businesses will have to bear the payments of this reduced debt through their electricity bill.
“We will continue our drive for assurance with that in mind[where]PREPA needs to continue and Puerto Rico needs reliable electricity,” Skell added, which is the goal of this plan.
In addition, the FSB reached a preliminary agreement on Friday with the National General Securities Insurance Company to guarantee financing, subject to documentation of final terms.
He said there is currently no agreement with the holders and guarantors of the other $7.6 billion of PREPA notes.
The plan allows these bondholders to join a class pursuant to a guaranteed minimum distribution or join another class dependent on the outcome of a lawsuit appealed by the Oversight Board in September to limit the taxation of these people on the income of that state power.
Likewise, the suit seeks to severely limit the allowable claim of bondholders to whom distributions can be paid.
The class of creditors who want to come to an agreement proposes a minimum redemption of 50 per cent to bondholders, subject to additional payments, potentially substantial, if those who want to litigate do not prevail against PREPA.
“The class of creditors who wish to litigate will receive distributions based on court decisions on two main issues; the Oversight Board will continue to negotiate with creditors in the hope of avoiding costly and lengthy litigation,” the written statements read.
The debt settlement plan also proposes distributing a contingent value instrument to creditors, which will mortgage Puerto Rican consumers for the next 35 years.
If PREPA, in the process of being dismantled by the annexation government, Pedro R. The Authority exceeded the expectations of its approved financial plan.
nmr/nrm
“Award-winning alcohol trailblazer. Hipster-friendly internetaholic. Twitter ninja. Infuriatingly humble beer lover. Pop culture nerd.”