By The Star Staff
The mediation team created in April 2022 to facilitate confidential negotiations that would help settle the island’s debt informed the federal Title III court Tuesday that it is not participating in talks between the Financial Oversight and Management Board and Puerto Rico Electric Power Authority (PREPA) creditors.
In an informative motion, the mediation team said it has been kept apprised of discussions between the oversight board and mediation parties. The group did not give the reasons why it is not helping mediate talks with PREPA bondholders.
“The Mediation Team has not been directly involved in such discussions and, accordingly, is not in a position to provide more detailed information to the Court regarding” PREPA’s talks with bondholders and other creditors, the officials said.
“Likewise, the Mediation Team is not in a position to provide any information regarding the schedule, if any, of upcoming discussions,” the group added.
In an urgent motion filed last Thursday, the oversight board told the bankruptcy court that it “has reached an agreement in principle with a substantial number of holders of PREPA bonds to settle their respective claims against PREPA.”
In light of this development, the oversight board sought from the court a further extension of certain plan filing and confirmation-related deadlines in order to finalize the necessary documents, including, but not limited to, a bond purchase agreement and restructuring support agreement (RSA) and to prepare a third amended plan reflecting the agreements in the RSA.
The court granted an extension until this Friday, Aug. 18.
The oversight board has stated that the RSA will be open for all PREPA bondholders to join. It has also informed the court that, if the extension is granted, it may lead to another significant party settling its claim, “but the Oversight Board will not request another extension to further accommodate other parties.”
The STAR learned Tuesday that certain monolines or bond insurers are not participating in the negotiations.
PREPA has been in bankruptcy since 2017 to restructure some $9 billion in debt. A few months ago, U.S. District Judge Laura Taylor Swain declared that $8.4 billion in bonded debt was unsecured and that bondholders only have a claim guaranteed for up to $2.3 billion.