Editorial: ‘Same old trick’ in debt restructuring at Puerto Rico Electric Power Authority FacebookTwitterLinkedInEmailPrint分享Caribbean Business News:The most recent announcement of a preliminary deal between Prepa and its bondholders includes a transition charge to help pay for a bond exchange with creditor constituencies that do not include the monoline bond insurance companies and the fuel-line lenders. This is akin to stalled hyper-mitosis in cell division prior to birth—a Prepa deal takes at least two-thirds of the creditor groups brought into the fold to bind the holdouts in a consensual deal. Much work remains to be done.Early in Puerto Rico’s debt game, the complex makeup of that bankrupt utility’s creditor constituencies—somewhat emblematic of Puerto Rico’s debt—made it an important target in the restructuring jamboree inside the Puerto Rico Oversight, Management & Economic Stability Act (Promesa).Thus, Promesa’s circus master, U.S. House Natural Resources Committee Chairman Rob Bishop (R-Utah) tasked staff director Bill Cooper to codify the deal into law when he was enacting Promesa in 2016. But the rate case then, as now in this latest iteration, is likely to sting.Try as they might to privatize Prepa, members of U.S. Congress who have invested considerable political capital—some with midterms upon them, no less—would like to see a securitization mechanism that will not blow Puerto Rico’s rates sky high. After all, the discourse employed by the energy brigades on Capitol Hill—that Puerto Rico needs affordable and reliable power to chart a path to growth—rings a bit hollow if the people have to foot the bill for a 20 percent hike in their electric bills five years afield.The inevitability of a rate hike first reared its ugly head when Prepa’s Chief Restructuring Officer Lisa Donahue took a crack at restructuring the power company’s massive $9 billion debt load under the administration of then-Gov. Alejandro García Padilla. Donahue managed to work out 17 forbearance agreements with creditors that showed a propensity to push debt-payment deadlines down the road as they tried mightily to strike a bond exchange. Then, as now, somebody was going to pay dearly—the answer always came back to shared pain by the people.Today, the declining population continues to present high-wire dangers in the restructuring of Prepa’s debt. There seems to be no way around the transition charge as the deal is currently structured. The transition charge, which is a fee that will be used to pay for debt service, will be 2.35 cents per kWh for years one to five; 2.7 cents for years six to 10; and 2.8 cents for year number 11. However, starting in year 12, there will be annual 2.5 percent increases over the prior year’s transition charge. Shared pain by the people, indeed.In fact, the language in a draft bill to privatize Prepa, authored by Rep. Don Young (R-Alaska) and circulated on the Hill several weeks ago, implies significant challenges in the privatization of the utility tied specifically to a shaky profit and loss forecast absent rate hikes. That self-evident truth prompted the inclusion of language enabling a $3 billion backstop structure financed by U.S. Treasury to fill any funding gaps by investors who purchase Prepa generation assets.This newspaper made a quick visit to Capitol Hill two weeks ago to see firsthand which way the currents of change were blowing. Frustration was a very common emotion etched on faces of those dealing with Prepa. As one House Natural Resources aide put it: “We could have had this done two years ago and avoided all this mess.” Yes; but at what cost and paid for by whom? If the answer is by “we the people,” then the Prepa overhaul for the people, by the people is a sham. And economic development will be a decades’ old memory, a story told in history books, but not seen in our lifetime.More: Same Old Tricks in Prepa Circus
Saudi Arabia’s International Maritime Industries (IMI) has signed a vessel purchase agreement (VPA) with the National Shipping Company of Saudi Arabia (Bahri) and a subsequent sub-contract agreement with South Korean shipbuilder Hyundai Heavy Industries (HHI) to build one very large crude carrier (VLCC).As informed, the 319,000 dwt tanker is to be constructed at HHI’s Ulsan shipyard and delivered in October 2021.Other agreements related to licensing, technical services and training were also signed with HHI to ensure capability building and knowledge transfer.Established in late 2017 and headquartered in Ras Al-Khair, IMI is a joint venture between Bahri, Lamprell, Saudi Aramco and HHI. When fully operational in 2022, this nearly 12-million-square-meter integrated maritime yard will be one of the largest full-service maritime facilities.The project award is said to further strengthen the business relationship between IMI and its shareholders, as well as contribute to the development of a localized maritime industry supply chain infrastructure, technical expertise for Saudi nationals, and a track record in shipbuilding.“This sub-contract award provides many benefits for IMI, including transfer of knowledge from HHI to IMI, a mechanism to grant use of Intellectual Property (IP) to IMI, development plans for IMI employees to acquire new skills in shipbuilding and planning, as well as technical assistance,” Fathi K. Al-Saleem, IMI Chief Executive Officer, explained.“This project award will also contribute to the long-term growth of this new industry in Saudi Arabia and will enable IMI to independently build VLCCs in Saudi Arabia to the highest international shipbuilding standards,” he pointed out.Commenting on the award, Abdullah Aldubaikhi, CEO of Bahri, said: “Bahri is committed to playing a pivotal role in transforming the Kingdom into an important regional and global logistics and transportation hub…This project award … signifies a major development in this direction; we are confident it will provide a boost to our ongoing efforts aimed at enhancing our offerings and bolstering our capabilities.”Located in The King Salman Complex for International Maritime Industries & Services, IMI will have an annual capacity of four newbuild offshore rigs and over 43 newbuild vessels including VLCCs, in addition to servicing more than 260 maritime products.The first phase of production operations is expected to commence toward the end of 2020 with the facility reaching its full production capacity by 2022.
The Basketball team of Bosnia and Herzegovina, which returned to Sarajevo on Tuesday from Kranjska Gora, after two days of rest on Friday will continue with the preparations for the European Championship.B&H Team spent 12 days trainings in Kranjska Gora, and from 1st August, the coach Aleksandar Petrović has the entire squad, considering the fact that Mirza Teletović joined the team.Actually, it was the captain of B&H team that was criticized from the selector, who was not satisfied with his form. But Petrović said that this is not such a big problem to keep him excluded from the team.“What makes me worried regarding Teletović is that his view of his role in the team is very different from mine. The two of us will have to resolve these dilemmas”, said Petrovic for reporters on arrival in Sarajevo.“Mirza must understand that there is no player in the world, neither Drazen Petrović did not play without teammates, nor LeBron (James) in the first year of the Miami Heat could not play alone”, added Petrović.Selector of B&H team hopes that the problem will be solved in due time.“I want to let you know about issues that I believe we will be able to solve in the near future, although time is running out. On 13th of August we play the first preparatory match and I hope we will manage to solve this problem”, said Petrović.Teletović said that, as captain, he will try and continue to fulfill all the ideas of the selector.“I’ll try to achieve as soon as possible my previous good shape and to be a true leader of this great generation of players”, said Teletović, stressing that between him and the selectors has no disagreements and that his words he understand as an encouragement for the future.How serious he understood the criticism of the selector, Teletović showed by additional involvement in trainings to get as soon as possible his good form. On his Twitter profile he published photographs from the gym with the comments “Order, work and discipline” and “More and Stronger”The Representation Team in Sarajevo will stay until Sunday, where they will train twice a day, and on Monday is planned a new trip to Slovenia, where they will play four control matches. The first match on 13th August B&H plays against Georgia in Celje, with the same opponent will meet and a day later in Jesenice. After that will follow the match against Slovenia (August 16th) and Russia (August 17th), after that the team will return to Sarajevo.By the end of the preparation B&H basketball players will participate in two more tournaments in Germany and Greece, where they will play six games.At Euro basket in Slovenia B&H will participate in the group with selections of Serbia, Montenegro, Macedonia, Latvia and Lithuania. The first match will be played on 4th September against Latvia.(Source: Fena)