New Fortress Energy faces crucial deadline in financial restructuring

If New Fortress Energy Inc. fails to strike a deal with creditors, it risks a severe credit event that could destabilize its business as a provider of liquefied natural gas. (newfortressenergy.com)

By THE STAR STAFF

New Fortress Energy Inc. (NFE), the parent company of Genera PR, which operates Puerto Rico’s legacy power plants, is entering a critical period as it approaches a looming Jan. 9 deadline to secure a sweeping financial restructuring.

If the company fails to strike a deal with creditors, it risks a severe credit event that could destabilize its business as a provider of liquefied natural gas (LNG).

Investor confidence has plummeted: over the last 10 trading sessions, NFE shares have dropped roughly 14.6%, closing at just $1.11 per share.

What’s fueling the pressure? In late December, S&P Global Ratings downgraded the company to a “Selective Default” (SD) rating. This came after NFE missed a $30.6 million interest payment on its Term Loan B and conceded it couldn’t meet year-end principal obligations. S&P flagged the firm’s liquidity as “weak,” noting much of its $389 million in cash is reserved for capital projects in Brazil -- leaving little room for maneuvering amid restructuring talks for its senior secured 2029 notes.

Adding to investor discomfort, NFE’S third-quarter fiscal 2025 results (reported Nov. 21) showed a net loss of $293.36 million. Revenue plunged 42.3% year-over-year to $327.37 million -- well below analysts’ $700+ million expectations. Losses also beat forecasts: the company posted a -$1.07 EPS versus a consensus estimate of -$0.67. Paired with the missed December payments, these results have fueled a wave of stock selling.

The company operates the LNG import terminal in San Juan Harbor and supplies much of the island’s gas-fired generation, including the combined-cycle units 5 and 6 at the San Juan power plant -- as well as emergency generators added after Hurricane Fiona.

In July 2025, the Financial Oversight and Management Board for Puerto Rico blocked a proposed $20 billion, 15-year contract between Genera PR and its LNG unit. Regulators warned this deal could lock the island into a monopolistic arrangement, stifle competition, and threaten energy security. The island’s energy czar, Josue Colón Ortiz, defended the proposal, noting that NFE already had exclusive rights to the northern LNG import terminal -- a situation sanctioned in 2018. Negotiations ultimately collapsed by July, with nearly $20 billion in potential LNG supply deals scrapped. Puerto Rico then paused discussions and turned to other vendors for short-term contracts. By September 2025, NFE and Puerto Rico trimmed the proposal to a $4  billion agreement.

In January 2025, the company signed a 20-year gas supply contract with the Energiza project, a combined-cycle power plant (478 megawatts) slated for 2028 near the San Juan terminal.