Puerto Rico's Efforts To Restructure $9 Billion Debts Of Its Power Company Gets Delayed

Officials handling the debt restructuring of Puerto Rico’s Electric Power Authority asked for and received an extension on Thursday to submit a proposal on how the government agency can avoid bankruptcy despite its $9 billion debt.

Federal Judge Laura Taylor-Swain approved the week-long extension for the submission of the proposal from the mediation team, believing that the complexity of the case makes the added time “reasonable and necessary,” according to the Associated Press.

The mediation team said that the extension was necessary due to the federal control board that oversees the island’s finances refusing to submit basic data that was relevant to the bankruptcy case. The federal control board has reportedly agreed to submit the data by Friday, forcing the team to ask for the extension.

“Stated differently, good faith negotiations...require transparency from both sides and continued engagement,” the team said in the filing.

The mediation team is currently looking to negotiate the debt restructuring between the Puerto Rican government and the bondholders who are owed the debt.

A fresh round of talks was ordered in September after no movement was made in the case between the two parties–months after Puerto Rico Gov. Pedro Pierluisi scrapped a debt restructuring for the power company that was months in the making, ABC News reported.

Puerto Rico, a U.S. territory, had to declare bankruptcy in 2015 after it was unable to pay $70 billion in debt that was accumulated over decades of mismanagement and corruption. It is the largest U.S. municipal bankruptcy on record, and much of the debt had to be restructured to keep the territory going.

The restructuring of the Electric Power Authority’s $9 billion debt is all that remains in the way of economic recovery for the U.S. territory, as the island’s power grid needs to be updated from its aging and neglected infrastructure, and the continued expense of the debt has caused electricity bills in the island to skyrocket.