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250721.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Monday, July 21, 2025, Vol. 26, No. 144 Headlines A R G E N T I N A ARGENTINA: Inflation Ticked Up Slightly, Less Than Expected YPF SA: US Judge Extends Handover Deadline B R A Z I L BRAZIL: To Raise Levies on U.S. Products if Negotiation Fails NATURA COSMETICOS: Fitch Affirms BB+ Long-Term IDRs UNIGEL PARTICIPACOES: S&P Downgrades ICR to 'CC', Outlook Negative C U B A CUBA: Economic Crisis Worsening E C U A D O R ECUADOR: IMF OKs Augmentation of EFE Arrangement; May Draw USD600MM P U E R T O R I C O JAL OUTLET: Hires Charles A. Cuprill P.S.C. as Counsel PUERTO RICO: Energy Czar Defends LNG Supply Deal PUERTO RICO: Restarts Power Auction After Court Halts Previous Deal - - - - - ================= A R G E N T I N A ================= ARGENTINA: Inflation Ticked Up Slightly, Less Than Expected ----------------------------------------------------------- Manuela Tobias at Bloomberg News reports that inflation in Argentina ticked up slightly and less than expected in June, another win for President Javier Milei ahead of midterm elections after a large seasonal component pulled May's reading down to a five-year low. Consumer prices rose 1.6 percent last month from May, less than the 1.9 percent median estimate of economists surveyed by Bloomberg. Annual inflation slowed to 39.4 percent, according to government data. May's 1.5 percent print was the lowest since May 2020, according to Bloomberg News. June's print was expected to pick back up without extra help from seasonal forces, like fruits and vegetables, which anchored May inflation - although a decline in international food commodities likely helped keep prices stable, Bloomberg News relays. Additionally, the currency weakened 1.2 percent in June on heightened volatility, as the peso floats between bands determined with the International Monetary Fund, Bloomberg News discloses. "It's good to be able to sustain inflation below two percent, although it depends in part on the performance of seasonal products, which again fell," said Sebastian Menescaldi, director of EcoGo, a consulting firm in Buenos Aires, notes the report. "The most positive takeaway is that core inflation fell below two percent for the first time," he added. Housing, water, electricity and other fuels weighed heaviest on the June reading, according to the government data, Bloomberg News relays. Food and beverages and clothes registered the lowest price increases, Bloomberg News notes. Core inflation was the lowest since May 2020, Bloomberg News recalls. In the first two weeks of July, the peso's value fell about five percent, yet economists predict a minimal impact on prices, Bloomberg News notes. The currency weakened on increased seasonal demand for dollars ahead of South American winter holidays and the usual electoral turmoil ahead of a midterm vote, Bloomberg News relays. Argentina's Senate approved a flurry of bills that jeopardize Milei's hard-won fiscal surplus, the pillar of his economic program, Bloomberg News notes. "There may be volatility, that's it," Economy Minister Luis Caputo said during an impromptu television interview July 9, Argentina's independence day, as he sought to calm market expectations ahead of the vote in the upper chamber, the report relays. "It's not a problem." Interest rates veered sharply into positive territory since the new IMF agreement, signed in April, although with less of a differential in recent weeks, Bloomberg News says. The high cost of borrowing is slowing down the rebound in economic activity, which still shows significant signs of year-on-year improvement, Bloomberg News notes. Economists surveyed by the Central Bank expect five percent growth this year, adds Bloomberg News. Argentina will go to the polls in October to vote for a large part of the national congress, and the economy will be the main item on the ballot, Bloomberg News notes. In September, Buenos Aires Province, home to nearly 40 percent of the population, will also vote for its local representatives, Bloomberg News discloses. A good election result for Milei could convince wary investors that his pro-market reforms are here to stay, Bloomberg News adds. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Javier Milei is the current president of Argentina after winning the November 19, 2023 general election. He succeeded Alberto Angel Fernandez in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019, according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. In March 2022, the International Monetary Fund (IMF) approved a 30-month arrangement under an Extended Fund Facility for Argentina in the amount of SDR 31.914 billion (equivalent to US$44 billion, or 1000 percent of quota) -- with an approved immediate disbursement of an equivalent of US$9.65 billion. Argentina's IMF-supported program sought to improve public finances and start to reduce persistent high inflation through a multi-pronged strategy. On April 11, 2025, the IMF further approved a 48-month Extended Fund Facility (EFF) arrangement for Argentina totaling US$20 billion (or 479 percent of quota), with an immediate disbursement of US$12 billion, and a first review planned for June 2025 with an associated disbursement of about US$2 billion. The program is expected to help catalyze additional official multilateral and bilateral support, and a timely re-access to international capital markets. Fitch Ratings, on May 12, 2025, upgraded Argentina's Long-Term Foreign-Currency and Local-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'. The upgrade reflects the launch of a new IMF program, among other things. S&P Global Ratings, in February 2025 lowered its local currency sovereign credit ratings on Argentina to 'SD/SD' from 'CCC/C' and its national scale rating to 'SD' from 'raB+'. Moody's Ratings, in January 2025, raised Argentina's local currency ceiling to B3 from Caa1 and the foreign currency ceiling to Caa1 from Caa3. DBRS, Inc. upgraded Argentina's Long-Term Foreign and Local Currency Issuer Ratings to B (low) from CCC in November 2024. YPF SA: US Judge Extends Handover Deadline ------------------------------------------ Buenos Aires Times reports that the New York federal judge who gave Argentina July 15 to cede its controlling stake in YPF SA to holders of a $16 billion judgment granted the South American nation a three-day extension to seek a longer delay from an appeals court. The report says US District Judge Loretta Preska's ruling put her June 30 order on a brief hold, but she denied Argentina's request for a longer stay, saying the nation "continues to delay and circumvent its obligations." The judge also cited the nation's failure to post an appeal bond, which is required to stay enforcement of the ruling until the appeal is decided, notes Buenos Aires Times. Argentina has asked a federal appeals court for more time, arguing that Preska exceeded her authority by ordering the turnover, recounts the report. Preska, who ruled in 2023 that Argentina owed billions to shareholders affected by a 2012 nationalisation of YPF, found last month that the country's 51-percent stake wasn't shielded by foreign sovereign immunity, recalls Buenos Aires Times. She ordered Argentina to turn over the shares within 14 days to a group led by Burford Capital, a litigation funder that bought the interests of the original shareholders. About YPF SA YPF SA, an energy company, engages in the oil and gas upstream and downstream activities in Argentina. Its upstream operations include the exploration, exploitation, and production of crude oil, and natural gas. The company's downstream operations include petrochemical production and crude oil refining; transportation and distribution of refined and petrochemical products; commercialization of crude oil, petrochemical products, and specialties. As reported in the Troubled Company Reporter-Latin America in January 2025, Fitch Ratings affirmed YPF S.A.'s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'CCC'. Additionally, Fitch has affirmed YPF's outstanding senior unsecured notes at 'CCC' with Recovery Rating of 'RR4'. The company's Standalone Credit Profile (SCP) remains 'b', and its ratings are aligned with Fitch's "Government Related Entities Criteria," reflecting government ownership and strategic importance. =========== B R A Z I L =========== BRAZIL: To Raise Levies on U.S. Products if Negotiation Fails ------------------------------------------------------------- globalinsolvency.com, citing the Associated Press, reports that Brazilian President Luiz Inacio Lula da Silva said that he would impose retaliatory tariffs on the United States if President Donald Trump follows through on a pledge to boost import taxes by 50% over the South American country's criminal trial against his predecessor, Jair Bolsonaro. Lula said he would trigger Brazil's reciprocity law approved by Congress earlier this year if negotiations with the U.S. fail, according to the report. "If there's no negotiation, the reciprocity law will be put to work," he said, the report adds. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian general election. He was sworn in on January 1, 2023, as the 39th president of Brazil, succeeding Jair Bolsonaro. In October 2024, Moody's Ratings upgraded the Government of Brazil's long-term issuer and senior unsecured bond ratings to Ba1 from Ba2, the senior unsecured shelf rating to (P)Ba1 from (P)Ba2; and maintained the positive outlook. S&P Global Ratings raised on Dec. 19, 2023, its long-term global scale ratings on Brazil to 'BB' from 'BB-'. Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable Outlook. DBRS' credit rating for Brazil was last reported at BB with stable outlook at July 2023. NATURA COSMETICOS: Fitch Affirms BB+ Long-Term IDRs --------------------------------------------------- Fitch Ratings has affirmed Natura Cosmeticos S.A.'s (Natura) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB+' and Long-Term National Scale Rating at 'AAA(bra)'. The Rating Outlook for the IDRs and National Scale Rating is Stable. Fitch has also affirmed Natura &Co Luxembourg Holdings S.a.r.l's unsecured notes at 'BB+' and withdrew Natura &Co Holdings S.A.'s 'BB+' IDRs and 'AAA(bra)' National Scale Rating, following its organizational restructuring. Natura's ratings reflect its strong business positioning and brand reputation in the Cosmetics, Fragrances and Toiletries (CF&T) market and diversified asset base, balanced against challenges to turn around Avon's operations amid weak brand awareness, fierce competition and changing consumer behavior. The ratings also factor in expectations that Natura will maintain EBITDAR net leverage below 2.0x and robust financial flexibility while executing the second wave of integration between Natura and Avon brands in Latin America. Natura &Co Holdings S.A.'s ratings have been withdrawn due to corporate reorganization. Key Rating Drivers Turnaround in Process: Natura is poised to complete the second phase of integration in Argentina and Mexico, its largest markets after Brazil. Early results in other countries suggest increasing sales and productivity; however, Fitch expects short-term challenges that will limit Natura's ability to improve revenues, profitability and cash flow. The company is also preparing to relaunch the Avon brand to address shifting consumer preferences and competition from emerging brands. Greater autonomy over Avon's product strategy allows Natura to leverage its innovation, in-house manufacturing and R&D capabilities to strengthen Avon's positioning in the entry-level market. Latin America Focus: Following the sale of Aesop and The Body Shop in 2023, Natura is exploring options to divest Avon's operations outside Latam, which account for 20% of revenues, is cash flow negative and complex to manage due to its presence across multiple non-core regions. Once Natura completes the Latin American integration, Fitch expects the company to focus on innovation, brand development, commercial strategies, and digital initiatives, such as the Emana Pay (company's fintech). Investments will also focus on Avon's rebranding and growing market share in Mexico through the Natura brand, where it has low household penetration compared with Brazil and Argentina. Profitability to Improve: Fitch expects Natura's EBITDAR to gradually improve to BRL4.0 billion (12.9% margin) in 2025 and to BRL4.8 billion (14.5% margin) in 2026, reflecting continued strong performance in Brazil, gradual cost dilution across Latin America — particularly in Mexico — driven by cross-selling initiatives, and reduced cash burn at Avon International. The CFO margin is projected at 2.7% of revenues in 2025 and 3.9% in 2026. FCF should remain negative during the next three years due to higher dividends, although pre-dividend FCF should turn positive by 2026. Fitch projections include average annual capital expenditures of approximately BRL700 million. Robust Capital Structure: Fitch expects Natura to maintain a strong capital structure in the rating horizon, with EBITDAR leverage and EBITDAR net leverage below 3.0x and 2.0x, respectively. Good brand-level results in Brazil and gradually lower cash burn after the second wave integration concludes should allow Natura to maintain adequate debt levels while increasing its EBITDAR. Total debt in March 2025 was BRL7.8 billion and consisted of BRL6.6 billion in 2028 and 2029 local and cross-border bonds, BRL860 million in leases and BRL220 million in derivative obligations, according to Fitch's criteria. Weaker Strategy Execution: The voluntary Chapter 11 filing by Avon Products International (API) in August 2024, alongside unsuccessful strategic decisions related to the acquisitions of Avon and The Body Shop, has negatively impacted Natura's governance, according to Fitch. The company's current strategy to focus on its core business and key regions and to divest from Avon's operations outside Latin America is seen as positive, though it has yet to materialize. Natura also needs to improve its cash flows and profitability on a sustainable basis. Fitch believes potential cash inflows from the Avon international divestiture will be immaterial. Peer Analysis Natura's ratings reflect its good business position in the Latin America CF&T industry, with leading market share in Brazil, Argentina and Peru and increasing participation in Chile, Colombia and Mexico, as well as its conservative financial profile. Rated peers in the consumer and beauty products space include Coty Inc. (BB+/Stable Outlook). Coty's ratings reflect its leading market position as one of the world's largest beauty companies with a recently improved mix toward higher growth and higher margin prestige fragrance and skin care, and signs of stabilization in its consumer beauty business. Coty has a more positive track record of stable and growing CFOs compared with Natura, but its forecast EBITDA leverage of mid-3.0x in 2025F compares negatively with Natura's 2.2x. Natura also faces strong competition from local player, O Boticário (not rated), which has a solid business profile, supported mainly by its bricks-and-mortar franchise and adequate leverage. Within the retail/consumer universe, Fitch rates MercadoLibre, Inc.'s (MELI) 'BBB-'/Stable. MELI's rating reflects its leadership position in the competitive and underpenetrated e-commerce and digital payments sectors in Latin America, solid credit metrics and robust financial flexibility. It is more diversified than Natura, operating in different product categories through its marketplace, and offers financial services like credit cards and loans. Key Assumptions - Latin America 's revenues growing between 9%-11% during 2025-2027; - Avon's international operations dropping 14% annually in 2025 and 2026; - Consolidated EBITDAR margins gradually converging to 15% by 2027; - Capex of around BRL700 million per year; - Share buybacks of BRL500 million in 2025; - Dividend payment equivalent to 30% to 50% of net income. RATING SENSITIVITIES Factors That Could, Individually Or Collectively, Lead To Negative Rating Action/Downgrade - Reputational damages to the brand, relevant contingency materialization or perception of weaker access to the debt markets; - Consolidated EBITDAR leverage above 3.5x and EBITDAR net leverage above 3.0x; - EBITDAR fixed-charge coverage below 4.0x; - Competitive pressures leading to severe loss in market-share for either Natura and Avon; - A downgrade of Brazil's sovereign rating could negatively affect Natura's IDRs. Factors That Could, Individually Or Collectively, Lead To Positive Rating Action/Upgrade - Positive FCFs in the rating horizon, because of stabilization in the company's operating performance; - Consistent EBITDAR margins improvements commensurate with peers (15%-20%); - Consolidated EBITDAR leverage below 2.0x and EBITDAR net leverage below 1.5x on a consistent basis; - EBITDAR fixed-charge coverage above 5.5x; - Maintenance of strong liquidity and no refinancing risks within 18-24 months. Liquidity and Debt Structure Natura has historically maintained robust financial flexibility with high cash reserves and lengthened debt profile. The company has good access to the banking and the local and cross-border capital markets, having accessed different funding sources. As of March 2025, cash and equivalents totaled BRL3.7 billion, compared with BRL140 million in short-term debt, BRL365 million maturing in 2026 and BRL245 million in 2027. Most of Natura's debt (bonds) are due in 2028 and 2029. Natura's ability to lower dividend payouts and generate positive FCF also strengthens its financial flexibility. Issuer Profile Natura is one of Latin America's largest companies in the Cosmetics, Fragrance & Toiletries sector, managing renowned brands Natura and Avon. The company operates through direct sales (90% of revenues), retail (5%), and online (5%). Summary of Financial Adjustments - Fitch used balance sheet lease liabilities to calculate adjusted debt; - Extraordinary items were removed from EBITDAR. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations Natura has an ESG Relevance Score of '4' for Management Strategy due to its corporate governance practices regarding API's chapter 11 and execution strategy, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Natura Cosmeticos S.A. LT IDR BB+ Affirmed BB+ LC LT IDR BB+ Affirmed BB+ Natl LT AAA(bra) Affirmed AAA(bra) senior unsecured Natl LT AAA(bra) Affirmed AAA(bra) Natura &Co Holding S.A. LT IDR WD Withdrawn BB+ LC LT IDR WD Withdrawn BB+ Natl LT WD(bra) Withdrawn AAA(bra) Natura &Co Luxembourg Holdings S.a r.l. senior unsecured LT BB+ Affirmed BB+ UNIGEL PARTICIPACOES: S&P Downgrades ICR to 'CC', Outlook Negative ------------------------------------------------------------------ S&P Global Ratings lowered its global scale issuer credit ratings on Brazil-based petrochemical company Unigel Participacoes S.A. to 'CC' from 'CCC' and its national scale issuer credit rating to 'brCC' from 'brB-'. The negative outlook indicates that S&P will lower its ratings on Unigel to 'SD' (selective default) or 'D' (default) upon confirmation of the standstill agreement and suspension of payments or if the company enters a new debt restructuring process. S&P now considers a default to be a virtual certainty. Unigel announced yesterday that it has begun negotiations with its financial creditors to formalize an agreement that will temporarily suspend the enforceability of certain pecuniary obligations of the company. This potential standstill agreement would constitute an event of default, in our view. We understand that the company remains current on interest and principal debt maturities, but the standstill agreement would be a way to preserve liquidity, which has faced pressure recently from challenging business conditions and the company's heavy capital structure. The negative outlook indicates that we will lower our issuer credit ratings on Unigel to 'SD' or 'D' upon confirmation of the standstill agreement and suspension of payments or if the company enters a new debt restructuring process. ======= C U B A ======= CUBA: Economic Crisis Worsening ------------------------------- RJR News reports that Cuba's economic crisis continues to worsen, with Economy Minister Joaquin Alonso reporting a 1.1 per cent contraction last year, adding to a 10 per cent decline since 2019. Alonso, speaking before the Cuban Parliament, warned there's little hope for recovery this year, citing tightening U.S. sanctions and falling foreign currency earnings, according to RJR News. The import-dependent nation has seen severe shortages of food, fuel, and medicine, with daily blackouts lasting up to 16 hours, the report notes. Agriculture, mining, and manufacturing have also seen major declines, the report relays. Alonso says Cuba is importing more than it exports, further increasing its debt, last officially reported at US$19.7 billion, the report adds. As reported in the Troubled Company Reporter on Aug. 7, 2024, Fitch Ratings has affirmed Colombia's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB+' with a Stable Rating Outlook. ============= E C U A D O R ============= ECUADOR: IMF OKs Augmentation of EFE Arrangement; May Draw USD600MM ------------------------------------------------------------------- The Executive Board of the International Monetary Fund (IMF) completed the second review of the EFF arrangement for Ecuador and approved an augmentation of the program by SDR 750.4 million (about US$1 billion). The Board's approval of the review and augmentation enables the authorities to immediately draw an amount of SDR 438.4 million (about US$600 million). Ecuador's 48-month EFF arrangement was approved by the Executive Board on May 31, 2024, providing access equivalent to SDR 3 billion (about US$4 billion) to support policies aimed at strengthening fiscal and debt sustainability, protecting vulnerable groups, rebuilding liquidity buffers, safeguarding macroeconomic and financial stability, and advancing the structural reform agenda for sustainable, inclusive, and stronger growth benefiting all Ecuadorians. The approved augmentation raises access under the program from about US$4 billion to about US$5 billion. The authorities' revised program will also catalyze additional financial support from multilateral partners. Program performance has been strong. Despite difficult circumstances, caused in part by security challenges and electricity blackouts due to a historic drought, the authorities successfully mobilized nonoil revenue and strengthened fiscal and external buffers, while continuing to enhance the protection of vulnerable groups. The authorities met all quantitative performance criteria for end-December 2024 and end-April 2025, most with wide margins. They also advanced their structural reform agenda, achieving progress on fiscal, governance, and financial sector structural benchmarks. In response to the new global landscape, characterized by tighter global financing conditions, heightened global uncertainty, and volatile oil prices, the authorities are implementing swift policy actions. These include the adoption of additional high-quality fiscal and structural reforms aimed at further strengthening the fiscal position, enhancing resilience, and promoting stronger and job-rich economic growth, while protecting vulnerable groups. The authorities will pursue new structural benchmarks to attract private investment into high potential sectors such as mining, hydrocarbons, and energy, as well as to foster domestic capital market development and financial deepening. Decisively advancing the economic reform agenda is expected to realize significant growth dividends over the medium term. Economic growth is projected to recover alongside low inflation, with incipient signs that the economy has rebounded following last year's contraction. The current account balance is projected to continue to record sizable surpluses, bolstered by strong non-oil export performance, facilitating a continued improvement in international reserve buffers. The updated fiscal plan under the EFF and revamped structural reform agenda are projected to maintain public debt on a firm downward trend, supporting the authorities' objective of further lowering sovereign spreads and regaining access to capital markets next year. Following the Executive Board's discussion, Mr. Nigel Clarke, Deputy Managing Director and Acting Chair, issued the following statement: "The Ecuadorian authorities have made significant progress in implementing their economic program supported by the Extended Fund Facility (EFF) arrangement. Despite challenging circumstances, they have successfully mobilized non-oil revenues, strengthened fiscal and external buffers, and cleared domestic arrears while protecting vulnerable groups. The implementation of structural reforms is also progressing well. "The authorities are taking bold policy actions to advance fiscal reforms and address challenges arising from the new global landscape. Building on an already ambitious fiscal plan, they will boost the fiscal consolidation effort during the program period by 1.1 percent of GDP to strengthen the fiscal position and build buffers, alongside a more ambitious structural reform agenda to foster economic growth. The revised fiscal plan will maintain public debt on a downward path and support the authorities' objectives of further lowering sovereign debt spreads and regaining access to capital markets. "The authorities continue working to ensure the protection of vulnerable groups by enhancing the coverage of the social registry and expanding targeted cash transfers. These efforts will help mitigate any adverse impact from fiscal adjustment. "The authorities are advancing their financial sector policy agenda, implementing reforms in line with the recommendations of the 2023 Financial System Stability Assessment. They have intensified supervision and implemented capital restoration plans for some institutions. They are also working toward better aligning the interest rate cap system with market conditions. Efforts are also underway to strengthen financial regulation and oversight, enhance the resolution toolkit, and develop the domestic capital market. "Finally, the authorities have announced a more ambitious structural reform agenda aimed at unlocking Ecuador's growth potential. It focuses on improving the security situation, strengthening energy resilience, and promoting inclusive growth and job creation. The authorities will pursue new measures to diversify the economy; attract private investment in high-potential sectors such as mining, hydrocarbons, and energy; and strengthen governance and the Anti-Money Laundering/Combatting the Financing of Terrorism frameworks." ===================== P U E R T O R I C O ===================== JAL OUTLET: Hires Charles A. Cuprill P.S.C. as Counsel ------------------------------------------------------ JAL Outlet, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Charles A. Cuprill, P.S.C., Law Offices as counsel to handle its Chapter 11 bankruptcy case. The firm will be paid at these rates: Charles A. Cuprill-Hernandez, Esq. $400 per hour Paralegal $85 per hour The firm received a retainer in the amount of $20,000. As disclosed in court filings, Charles A. Cuprill, P.S.C. is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Charles A. Cuprill, Esq. Charles A. Cuprill, P.S.C., Law Offices 356 Fortaleza Street 2nd Floor San Juan, PR 00901 Tel: (787) 977-0515 Email: ccuprill@cuprill.com About JAL Outlet, Inc. JAL Outlet, Inc. is a wholesale distributor of motor vehicles and automotive parts operating out of Hormigueros, Puerto Rico. The Company supplies products such as vehicle components, accessories, and related equipment to retailers and service providers. JAL Outlet, Inc. in Hormigueros, PR, sought relief under Chapter 11 of the Bankruptcy Code filed its voluntary petition for Chapter 11 protection (Bankr. D.P.R. Case No. 25-02796) on June 23, 2025, listing $10 million to $50 million in assets and $1 million to $10 million in liabilities. Jose A. Lugo Alverio as president, signed the petition. Judge Maria De Los Angeles Gonzalez oversees the case. CHARLES A. CUPRILL, PSC LAW OFFICES serve as the Debtor's legal counsel. PUERTO RICO: Energy Czar Defends LNG Supply Deal ------------------------------------------------ Jim Wyss and Ruth Liao of Bloomberg News report that the official leading Puerto Rico's energy recovery is urging progress on New Fortress Energy Inc.'s proposed $20 billion natural gas supply contract, dismissing a federal oversight board's objections as exaggerated. Energy Director Josue Colon argued that the Financial Oversight and Management Board's concern over a potential near-monopoly overlooks the reality that New Fortress already operates one of the island's limited liquefied natural gas import terminals, according to Bloomberg News. About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States. The chief of state is the President of the United States of America. The head of government is an elected Governor. There are two legislative chambers: the House of Representatives, 51 seats, and the Senate, 27 seats. The governor-elect is Ricardo Antonio â€œRickyâ€ Rossello Nevares, the son of former governor Pedro Rossello. In 2016, the U.S. Congress passed PROMESA, which, among other things, created the Financial Oversight and Management Board and imposed an automatic stay on creditor lawsuits against the government, which expired May 1, 2017. The members of the oversight board are: (i) Andrew G. Biggs, (ii) Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J. Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii) David A. Skeel Jr. On May 3, 2017, the Commonwealth of Puerto Rico filed a petition for relief under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (â€œPROMESAâ€). The case is pending in the United States District Court for the District of Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's PROMESA petition is available at http://bankrupt.com/misc/1701578-00001.pdf On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation (COFINA) commenced a case under Title III of PROMESA (D.P.R. Case No. 17-01599). Joint administration has been sought for the Title III cases. On May 21, 2017, two more agencies â€” Employees Retirement System of the Government of the Commonwealth of Puerto Rico and Puerto Rico Highways and Transportation Authority (Case Nos. 17-01685 and 17-01686) â€” commenced Title III cases. U.S. Chief Justice John Roberts named U.S. District Judge Laura Taylor Swain to preside over the Title III cases. The Oversight Board has hired as advisors, Proskauer Rose LLP and Oâ€™Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq., at O'Neill & Borges LLC are onboard as attorneys. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains the case Web site https://cases.primeclerk.com/puertorico Jones Day is serving as counsel to certain ERS bondholders. Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General Obligation Bondholders. PUERTO RICO: Restarts Power Auction After Court Halts Previous Deal ------------------------------------------------------------------- Ruth Liao and Jim Wyss of Bloomberg News report that Puerto Rico is restarting the bidding process for a contested 800MW temporary power generation contract after a local court ordered a halt to the original auction, Governor Jenniffer Gonzalez disclosed July 10, 2025. The revised contract will now span 10 years, up from the original three. More than a dozen companies had expressed interest in the initial bid, which was awarded to Miami-based Power Expectations, according to Bloomberg News. The award was challenged by Javelin Global Commodities, Gothams Energy, and Karpowership. New Fortress Energy was previously disqualified from participating in the original auction, the report relays. About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States. The chief of state is the President of the United States of America. The head of government is an elected Governor. There are two legislative chambers: the House of Representatives, 51 seats, and the Senate, 27 seats. The governor-elect is Ricardo Antonio "Ricky" Rossello Nevares, the son of former governor Pedro Rossello. In 2016, the U.S. Congress passed PROMESA, which, among other things, created the Financial Oversight and Management Board and imposed an automatic stay on creditor lawsuits against the government, which expired May 1, 2017. The members of the oversight board are: (i) Andrew G. Biggs, (ii) Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J. Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii) David A. Skeel Jr. On May 3, 2017, the Commonwealth of Puerto Rico filed a petition for relief under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"). The case is pending in the United States District Court for the District of Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's PROMESA petition is available at http://bankrupt.com/misc/1701578-00001.pdf On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation (COFINA) commenced a case under Title III of PROMESA (D.P.R. Case No. 17-01599). Joint administration has been sought for the Title III cases. On May 21, 2017, two more agencies -- Employees Retirement System of the Government of the Commonwealth of Puerto Rico and Puerto Rico Highways and Transportation Authority (Case Nos. 17-01685 and 17-01686) -- commenced Title III cases. U.S. Chief Justice John Roberts named U.S. District Judge Laura Taylor Swain to preside over the Title III cases. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq., at O'Neill & Borges LLC are onboard as attorneys. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains the case Web site https://cases.primeclerk.com/puertorico Jones Day is serving as counsel to certain ERS bondholders. Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General Obligation Bondholders. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. 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