Bahamas Power and Light (BPL) has been engaged with its rate reduction bond advisor for one month, the company’s Chairman Dr. Donovan Moxey said Sunday, as BPL charts the way forward towards restructuring its debt.
Moxey explained that Citibank, as the company’s advisor on its restructuring, has been for the past month leading BPL through the processes involved in the restructuring exercise.
BPL hopes to restructure $311 million in debt by the end of the year.
Moxey explained that BPL is hoping to raise between $450 million and $500 million from the restructuring exercise in both United States and Bahamian dollars. He said BPL has also been working with The Central Bank of The Bahamas on the restructuring exercise.
According to Moxey, BPL has been suffering from cash flow issues ever since an electricity rate change was made without a proper rate study, 10 to 15 years ago.
Moxey told The Nassau Guardian last month, shortly before announcing Citibank as its advisor: “Our intention is that by the end of this year, we would have restructured our debt in terms of having a new bond issued, gotten our payments to the point where they are much more manageable and reduced the amount of fees we pay for fuel on a monthly basis, because we would’ve transitioned out of having a majority of rental generation, to now having assets that we own that are running on the lower cost fuel.”
BPL announced in March that Finnish technology group Wartsila will install a new 132-megawatt engine power plant at Clifton at a cost of $95 million, to increase the generation capacity on New Providence.
In 2014, it was announced that the government planned to remove $450 million in legacy debt from BPL’s (then the Bahamas Electricity Corporation) books in a bid to allow the corporation to rationalize its expenses and improve its credit rating.
In August 2018, Minister of Public Works Desmond Bannister advised the BPL board that renewable energy, and the rate reduction bond to refinance BPL’s legacy debt and liabilities were top priorities.