Wednesday, July 1, 2015

Puerto Rico’s cash-strapped electric utility close to deal with creditors - from TRUNEWS

Puerto Rico’s cash-strapped electric utility and its creditors are close to a deal that would postpone a default by the utility when a $600 million payment comes due Wednesday, people familiar with the talks said.

If the deal is reached, it would effectively give the Puerto Rico Electric Power Authority (PREPA), which has about $9 billion in debt, an additional 90 days to reach agreement on a broader restructuring of its finances, thus “kicking [the] can” down the road, said one person familiar with the negotiations.

Puerto Rico Gov. Alejandro García Padilla on Monday portrayed his territory’s economic condition as even more dire than revealed and, in a televised address, appealed to Washington to make unprecedented changes in bankruptcy rules to help rescue the island’s finances. The deal with Puerto Rico’s electric utility would not affect the government’s struggle to reckon with the bulk of its roughly $73 billion in debt.

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