Puerto Rico’s financial oversight board filed a plan to restructure about $9 billion of power utility debt after failing to reach a deal with bondholders, signaling the agency’s five-year bankruptcy will take even longer to resolve, Bloomberg News reported. The federal board is overseeing the island’s finances and the debt proposals for Puerto Rico’s Electric Power Authority, known as Prepa, the main supplier of electricity on the island. The board wants to slash nearly 40% of Prepa’s debt — $8.5 billion in bonds and another $700 million in loans to fuel-line lenders — down to a combined $5.4 billion of new restructured securities, according to the debt adjustment plan submitted to the bankruptcy court Friday night. Court-ordered mediation between the board, insurance companies and an ad hoc group of bondholders has so far failed to produce a consensual repayment plan. At the same time, the parties are litigating whether bondholders are entitled to Prepa’s future revenue or limited to accounts holding about $16 million.
