Puerto Rico's main electricity provider and its bondholders are continuing negotiations to restructure almost $9 million in debt after failing to meet a deadline Friday that caused a tentative pact reached last month to be terminated.
The restructuring support agreement between the Puerto Rico Electric Power Authority and its creditors expired after lawmakers failed to pass legislation by Friday to enable Prepa, as the agency's known, to lower its obligations and implement a new customer surcharge. In a sign of progress, banks who finance its fuel purchases and the utility entered into a forbearance agreement on Sunday that keeps their negotiations out of court through Feb. 12.
While the restructuring agreement has expired, talks between the parties continue, Lisa Donahue, Prepa's chief restructuring officer, said in a statement Sunday. The termination was a step back for Puerto Rico, which is seeking to reduce $70 billion of debt. Gov. Alejandro Garcia Padilla Saturday warned lawmakers that the island may face blackouts if Prepa is unable to purchase enough fuel.