Financial turmoil at New Fortress Energy, parent company of Genera, worsens

By THE STAR STAFF

New Fortress Energy Inc. (NFE), the parent company of Genera PR, is grappling with a deepening financial crisis that threatens its pivotal role in Puerto Rico’s energy transformation. The company’s shares tumbled 25.6% last week after a regulatory filing revealed that NFE may seek U.S. bankruptcy protection if ongoing negotiations with lenders fail. Executives are also weighing a U.K. court process as an alternative restructuring route.

The energy firm, which once touted its integrated gas-to-power model as a solution for emerging markets, now faces a staggering $8 billion in liabilities against just $1.3 billion in assets. A recent forbearance agreement with creditors has postponed interest payments until December 15, offering only temporary relief as the company scrambles to stabilize its balance sheet.

At the heart of NFE’s financial woes is its inability to secure long-term liquefied natural gas (LNG) supply contracts for its Latin American operations. Reliance on volatile spot markets has driven up costs, while regulatory delays have compounded the strain. In Puerto Rico, where NFE operates the San Juan LNG terminal, the company has sought to lock in supply through a seven-year contract worth roughly $4 billion, sourcing gas from its offshore facility in Altamira, Mexico. The deal, however, remains under review by the island’s Financial Oversight and Management Board amid concerns over pricing and market competition.

Despite these challenges, NFE’s subsidiary Genera PR continues to manage Puerto Rico’s aging thermal generation fleet under a 10-year public-private partnership signed in January 2023. The agreement tasks Genera PR with operating, maintaining, and modernizing roughly 3,600 megawatts of generation capacity—plants that average 45 years in age and have long been plagued by reliability issues. The contract also includes performance incentives tied to cost savings and environmental compliance, as Puerto Rico pushes toward renewable energy targets mandated by law.

Yet the company’s precarious financial position casts uncertainty over these commitments. Critics warn that a proposed LNG supply arrangement, which could lock Puerto Rico into a single supplier for up to 15 years, risks creating a near-monopoly and undermining the island’s energy diversification goals. With NFE’s market capitalization now hovering around $321 million and its debt-to-equity ratio signaling severe distress, analysts question whether the firm can deliver on its promises without a sweeping restructuring.

For Puerto Rico, the stakes are high. The island’s fragile grid, battered by hurricanes and years of underinvestment, depends on a smooth transition to cleaner and more reliable power sources. Whether New Fortress Energy can navigate its financial storm without derailing that transition remains an open—and urgent—question.