Bacó: GDB should not be liquidated, must be re-focused
The fate of the Puerto Rico Government Development Bank should not be liquidation, but rather a refocus to return to promoting growth on the island, Acting President Alberto Bacó said Monday, the day he took on the job of steering the former public fiscal agent.
“We have to develop a plan to see how the GDB can fit into the new modern economy, and where we’re going to have a fiscal oversight board in place very soon. I firmly believe this is an institution that fits into the new Puerto Rico,” Bacó told reporters Monday. “I don’t believe the governor wants to liquidate the bank, otherwise he wouldn’t have appointed me, but a liquidation trustee.”
Bacó, who on Monday succeeded former GDB President Melba Acosta, who stepped down from the post effective July 31, said whether he’s on the job “for a day or for five months,” he plans to present Gov. Alejandro García-Padilla, within the next week or so, a plan to refocus the GDB so that it steers development.
“I’m convinced that any way you look at it, the GDB is indispensable for Puerto Rico’s economic health, for credit unions that have credit with the bank, for municipalities, and for individual creditors who hold GDB debt,” he said. “When there is a liquidation by a trustee, everybody loses, a lot.”
His statements contradict the proposal by his Popular Democratic Party peer and gubernatorial candidate David Bernier, who last month proposed naming a trustee to ensure a revaluation of assets and eventually begin a process of liquidation of the GDB.
The GDB “is unable to lend and borrow, so the corporate model is exhausted,” he said at the time.
Starting today, Bacó will set off a series of meetings, starting with Acosta, followed by GDB stakeholders, including credit unions, mayors, creditors, and consultants to determine the status of the bank’s operations.
As for negotiations with bondholders, Bacó said that is a process that will be taken over by the Puerto Rico Fiscal Agency and Financial Advisory Authority, headed by Víctor Suárez.
“I’m meeting with [Acosta], who had said that creditors had lost interest in negotiating because they were waiting for the oversight board to come in. That’s what I’ve been told,” Bacó said.