NEW YORK Turnaround experts from AlixPartners and FTI Consulting are among those being considered to lead the restructuring of Puerto Rico's troubled power authority PREPA, according to four people close to the matter, and an announcement could come this week.
PREPA, whose debt troubles are a symbol of the wider troubles threatening the U.S. territory, must select a restructuring chief by Monday under a forbearance agreement with lenders and other creditors as it undertakes to restructure more than $9 billion in debt.
The officer will negotiate with creditors on PREPA's behalf and lead efforts to develop a business plan by March.
AlixPartners' Lisa Donahue and FTI's Scott Davido are among the small group of candidates for the post of chief restructuring officer, according to the people, who declined to be named because the hiring process is confidential.
Two of the people said Donahue appeared to be the front runner, however, one said it would be premature to name a favorite at this stage. FTI is already well-versed in the situation as it was hired by Puerto Rico's Government Development Bank in April to advise on restructuring options.
One of the people said Joff Mitchell, of turnaround advisory firm Zolfo Cooper, was also being considered.
AlixPartners and Zolfo declined comment. FTI did not immediately respond to a request for comment.
All three candidates have experience restructuring companies in the energy sector, which could be key in a much-needed overhaul of the power authority's business. PREPA is widely seen by analysts as over-relying on expensive oil rather than cheaper natural gas.
Donahue served as restructuring officer to oil and gas company SemGroup LP (SEMG.N) and was chief financial officer at power company Calpine Corp (CPN.N), while Davido was chief restructuring officer at Calpine and chairman of NRG Energy (NRG.N).
Mitchell led a refinancing of Entegra Power Group and advised on the pre-arranged bankruptcy of two of TECO Energy’s power plants, according to Zolfo's website.
An announcement could come this week, ahead of Monday's deadline, two of the people said.
PREPA called the appointment of a restructuring officer by Sept. 8 "the first key milestone" in its agreements with creditors.
"The board is confident in its ability to meet the deadline specified in the agreement, but at this time, no decisions have been made," PREPA said in an emailed statement.