By Sophia Har
Puerto Rico's public utility company, the Puerto Rico Electric Power Authority (PREPA), reached a deal Wednesday with investors to extend debt negotiations. PREPA will pay $416 million immediately and then will have until September 15 to reach a long-term deal. PREPA owes a total of $9 billion in debt. Puerto Rican Governor Alejandro Garcia Padilla announced this week that the island cannot pay its $72 billion debt burden and asked to extend payment terms.
"Without access to US bankruptcy law or emergency financing, Puerto Rico has few options," said Eric LeCompte, executive director of the religious development organization Jubilee USA Network. It's good news that Puerto Rico won't default in the short term, but we need a long term solution."
Meanwhile, Senator Charles Schumer (D-NY) announced Tuesday he will introduce a bill to allow PREPA to access US Chapter 9 bankruptcy protection. Puerto Rico's representative in the US House introduced a similar bill (HR 870) in February. Puerto Rico is currently unable to access bankruptcy protection because it is a territory and not a US state.