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UPDATE 1-Creditors approached Puerto Rico with offers after Maria -official
October 2, 2017 / 9:22 PM / 2 months ago

UPDATE 1-Creditors approached Puerto Rico with offers after Maria -official

(Adds background, information from governor’s liaison Sobrino)

By Stephanie Kelly

NEW YORK, Oct 2 (Reuters) - Creditors approached Puerto Rico’s government with offers surrounding the U.S. territory’s bankruptcy after Hurricane Maria tore through the island last month, but federal aid remains the top priority, a Puerto Rico official said on Monday.

“Any offer we’ll review it, and we’ll discuss it with the oversight board and their advisers,” said Christian Sobrino, Governor Ricardo Rossello’s official liaison to the federally appointed Financial Oversight and Management Board.

The board is charged with helping Puerto Rico craft and follow a blueprint for the financial recovery from its massive debt crisis.

No offers by creditors have been put in place and the government has not met with creditor groups on the proposals, Sobrino said, adding that communications remain a challenge on the island.

Creditors of Puerto Rico’s bankrupt power utility PREPA already offered a $1 billion loan and a discount on existing debt last week after Maria knocked out power to Puerto Rico’s 3.4 million residents, but the government shut down the proposal, calling it a “publicity stunt.”

Puerto Rico, which declared bankruptcy in May, is weighed down by nearly $72 billion in debt.

Last month Puerto Rico’s government requested a four-week extension to meet key deadlines in its bankruptcy case after Maria. Sobrino said there are hearings regarding the bankruptcy scheduled for late October and November.

Puerto Rico is in danger of running out of cash in a matter of weeks because the economy has come to a halt in the hurricane’s aftermath, Rossello told local newspaper El Nuevo Dia in an interview published on Monday.

“There is no cash on hand. We have made a huge effort to get $2 billion in cash,” Rossello said. “But let me tell you what $2 billion means when you have zero collection: it’s basically a month government’s payroll, a little bit more.”

BOARD‘S REASSESSMENT OF FISCAL PLAN

Earlier on Monday, oversight board member Andrew Biggs told Reuters that the board will assess how damage from Maria will alter the U.S. territory’s “economic picture.”

Puerto Rico’s certified fiscal plan continues to be in place without changes, Sobrino said. The hurricane’s impact on the island - including the amount of funds the government must expend, in addition to revenue collections - still needs to be determined before decisions can be made, he said.

“What we are working on and paying a lot of attention to is the liquidity of the government, especially considering you have a change in how revenue is being collected, how businesses are operating,” he said. “In that, we’re keeping close attention to how we manage liquidity in the upcoming weeks.” (Reporting by Stephanie Kelly; Editing by Daniel Bases and Leslie Adler)

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