Government

PREPA reaches an arrangement with banking lenders

PREPA has reached agreements to keep creditors at bay. (Credit: © Mauricio Pascual) PREPA has reached agreements to keep creditors at bay. (Credit: © Mauricio Pascual)

The cash-strapped Puerto Rico Electric Power Authority announced Monday it had reached an agreement with lenders who provide revolving lines of credit used to pay for purchased power, fuel and other expenses.

The banks agreed to not exercise remedies as a result of credit downgrades and other events, said PREPA, adding as a result, it may delay certain payments currently due until July 31, 2014.

PREPA owes about $671 million due this month and August 2014. Of that amount, a credit line with Scotia Bank for $550 million is due Aug. 14, of which there is currently about $525 million outstanding. No information was provided with regards to that responsibility due.

“While PREPA faces certain financial challenges today, we are working hard to improve operations, strengthen service and modernize our infrastructure, so we can deliver cleaner and more reliable energy to our customers,” said Juan Alicea Flores, executive director for PREPA. “We thank our lenders for their ongoing cooperation and support as we work to transform PREPA to best serve our customers.”

Over the next few weeks, PREPA will continue discussions with the lenders and will use this period to evaluate various alternatives to improve its financial situation, agency officials said.

The agreements place no limits on PREPA’s ongoing operations. Payments due to employees and suppliers will continue to be paid in the normal course, the agency further noted.

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