The commissioners explained that the new plan includes about $136 million in further concessions from the county’s creditors, insurance on about $500 million of warrants and a $140 million line of credit from JP Morgan, which the county could use in lieu of borrowing more money for a debt service reserve fund. But a deeper look at the county’s new plan reveals something much more significant – the plan directs $495 million more to capital expenditures, sometimes called “capex.” The county’s financing plan is the road map for solving the county’s sewer debt crisis and emerging from Chapter 9 municipal bankruptcy. The plan would pay about $1.7 billion to creditors and finance that payment with new debt. Until Thursday, the plan was a closely guarded secret, known only to the commissioners, the county’s team of lawyers and financial advisors, and the creditors from whom the county has demanded further concessions. But it’s not merely the concession and interest rates that are causing changes in the plan. The county’s projections for its expenses and revenues have changed with each draft. Those shifts in the county’s projections don’t speak well for the current plan, according to Robert Brooks, professor of finance at the University of Alabama. “The fact that there are such differences in the two sheets shows that someone still isn’t confident about these numbers,” Brooks said. According to Brooks, making projections 40 years into the future, as the county’s plan does, is risky. He likened the county’s projections to the “cone of probability” weather forecasters use when predicting the path of hurricanes. The further out it goes, the greater the likelihood for variances. “The only thing that I can guarantee is that this is not what is going to come to pass,” he said. In fact, some of the county’s more imminent projections have changed, too, not just those decades in the future. For instance, the previous version of the county’s financing plan projected $52 million in sewer operating expenses in 2014. The new version projects more than $67 million in sewer operating expenses next year. Capital expenditures for the county’s sewer system would include the sort of bricks and mortar expenses the county has incurred since entering into a consent decree with the Environmental Protection Agency in 1996, including improvements in sewer lines and sewage treatment plants.
In July, Mubadala restructured approximately $2.3bn worth of debt owed by EBX, reducing the amount the conglomerate owes Abu Dhabi by more than 25 percent, Reuters reported. Under terms of the refinancing accord, EBX repaid a “significant part of Mubadala’s initial investment” and reworked contractual aspects, giving Mubadala an additional cushion on its investment in EBX, the company said. “OGX is not part of the agreement signed in July with EBX. The July agreement gives Mubadala improved protection for the remaining portion of its investment against certain assets, a Mubadala spokesperson told Arabian Business on Thursday. Mubadala remains in close discussions with EBX and a number of interested parties, as EBX continues to restructure its business, he added. Batista’s decline in recent months has become a symbol of Brazil’s own economic woes. After a decade-long boom in which investors poured cash into Brazil and Batista’s enterprises, Latin America’s largest economy has been in a rut for three years. OGX’s decision to seek protection from creditors came as no surprise. After missing a $44.5 million interest payment owed to bondholders on October 1, OGX scrambled to restructure its debt before the end of a 30-day grace period or be declared in default on $3.6 billion in bonds. The process was rocky from the outset, and OGX called off the talks with creditors on Tuesday, leaving a bankruptcy filing as the only viable option to buy it more time. In July a Mubadala spokesperson told Bloomberg many of EBXs assets still have significant value to a number of parties, including the wealth fund, and it may be interested to invest in more assets owned by Batista. Brazil’s 8-year-old bankruptcy law is similar to US Chapter 11 proceedings, and gives OGX a chance to reduce its liabilities and emerge as a going concern. Bondholders will play a key role in the process, though in recent cases – such as those of power companies Celpa SA and Grupo Rede Energia SA – some creditors complained that judges privileged the claims of state-owned banks over theirs. Indeed, bankruptcy cases have not always moved smoothly through Brazilian courts and some judges have been sympathetic to pressure from different stakeholder groups like employees, pensioners and shareholders, at times putting their interests above those of creditors, said Paulo Rabello de Castro, head of SR Rating, a Brazilian credit rating agency. OGX was founded in 2007 and raised $1.3 billion from private investors to buy oil concessions in November of the same year, a month after state-run Petroleo Brasileiro SA, or Petrobras, announced the discovery of a giant offshore oil province south of Rio de Janeiro.
Amira Lace 