NEW YORK (Reuters) - Puerto Rico Governor Ricardo Rossello said on Monday he does not want to “destroy” the pending debt restructuring deal for the island’s ailing power utility, but wants to “get a better one” as the U.S. territory’s fiscal situation worsens.
Rossello said in an interview that he was invited to Washington for a U.S. congressional hearing on March 22 to discuss the fate of Puerto Rico Electric Power Authority, also known as PREPA.
The new governor said he is aware that his unwillingness to rubber-stamp the existing deal, whereby PREPA’s creditors would take a 15 percent cut on their $8 billion in debt, has vexed stakeholders who thought they were close to a resolution.
But Puerto Rico’s financial picture has deteriorated since the deal was first struck, the governor said, adding that he is willing to renegotiate within the existing framework.
“If I didn’t care, I would have just blown the deal up,” Rossello told Reuters. “I’m not here to destroy a deal, I’m here to get a better one, based on the reality that things have changed.”
PREPA’s fate is one of the most contentious issues on an island facing $70 billion in debt. It was a focal point at Monday’s public meeting in New York of the island’s federally appointed financial oversight board.
During the meeting, the oversight board approved Rossello’s revised blueprint to steer the island out of economic crisis. [nL2N1GQ0TY].
The board voiced support for Rossello’s efforts to extract deeper concessions from PREPA creditors. They have grumbled privately that his opposition to the deal is political since it dates back more than a year to his predecessor’s time in office.
The U.S. House Committee on Natural Resources said it would hold a hearing on the status of the deal.
Rossello said he “received an invitation” to the hearing. “I’ll be there,” he said, but would not say if he had been subpoenaed.
Rossello also discussed austerity measures ordered by the board as conditions for its approval of the fiscal plan, including reducing pension spending by 10 percent.
The governor said he would not cut benefits to the island’s most vulnerable retirees.
“The board and I are a little over $100 million apart there... and I don’t see any way I can reduce pensions of people already having a hard time getting medications and things,” he said.
Rossello believes the island will avoid other austerity measures including furloughs and cuts to Christmas bonuses that the board has directed the utility to impose if it cannot find another $200 million to shore up its accounts by April 30.
“I’m very confident we’ll have $200 million in reserve cash, so that we can jump over that obstacle,” he said.
Reporting By Nick Brown; Editing by Daniel Bases and Diane Craft
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