INSIGHT-Donahue may bring tough love to Puerto Rico power agency
By Nick Brown, Megan Davies and Tom Hals
NEW YORK/WILMINGTON, DELAWARE, Sept 9 (Reuters) - Puerto Rico's indebted power authority better get used to some tough love from its new chief restructuring officer, Lisa Donahue, who has earned a reputation for decisiveness, hard work and a cold-blooded devotion to cutting costs.
Donahue, 49, who runs the restructuring practice at New York-based corporate consultant AlixPartners, has played key roles in massive corporate bankruptcies including those of Calpine and SemGroup LP, two energy giants.
"(SemGroup) was a freefall Chapter 11 filed at the last minute," said Hugh Ray, an attorney with McKool Smith in Houston who opposed Donahue when he represented a committee of oil and gas producers in SemGroup's bankruptcy. "This was total immersion and devotion and she's not afraid to fire every other person on the payroll if needed, and she'll do it quickly."
Donahue will be spending the foreseeable future commuting between Puerto Rico and her New York home to come up with a solution for the island's PREPA utility, which has racked up about $9 billion of debt and requires cost cuts and a fundamental change in how it sources fuel.
Solving PREPA's problems is key to turning around the fortunes of the island commonwealth, which has more than $70 billion of outstanding debt. Electricity rates are double those charged in much of the mainland due to the authority's reliance on burning oil to generate power rather than cheaper natural gas.
"PREPA is so important to the island, and so important to the Puerto Rican people," Donahue told Reuters on Friday in her first public interview since being hired. "The stakes are high."
She will likely be working day and night with unions, politicians and creditors' committees.
"It's like emergency room work, only seven days a week," said Ray, who recalled Donahue fueling up on cold Chinese food late at night while pulling SemGroup through. Continuación...