The Puerto Rico power utility PREPA, ladden with a $9 billion debt load, has filed for a form of bankruptcy, Puerto Rico’s primary fiscal agent said on Sunday.
The Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF) said PREPA power had filed in the United States District Court of Puerto Rico for protection under Title III of the 2016 Puerto Rico rescue law known as PROMESA, which gave Puerto Rico and its agencies access to a workout process akin to U.S. bankruptcy.
“I believe that the Title III filing will provide PREPA the tools necessary to assure its uninterrupted operation and achieve a successful restructuring,” said Gerardo Portela Franco, Executive Director of AAFAF
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PROMESA was created to help Puerto Rico emerge from a crisis marked by $72 billion in debt, a 45 percent poverty rate on the island and insolvent public pensions. Some public entities, including Puerto Rico’s central government itself, have already filed Title III cases.
For more about Puerto Rico’s debt crisis, watch Fortune’s video:
Puerto Rico’s seven-member financial oversight board created under PROMESA had unanimously authorized a bankruptcy filing at a public meeting in San Juan on Friday, granting a request by Governor Ricardo Rossello.
The filing comes after nearly three years of restructuring talks between the utility and its creditors, and the unraveling of two separate deals