By The Star Staff
Amid apparent liquidity problems, New Fortress Energy Inc. (NFE), the parent company of Genera PR, the private operator of the Puerto Rico Electric Power Authority’s legacy power plants, is seeking partners for its primary businesses.
In a document presented to the Securities and Exchange Commission (SEC), NFE announced a series of financing transactions that upon closing are intended to increase the company’s liquidity and financial flexibility.
“In furtherance of these goals, the Company has begun work to identify strategic partners for one or more of its primary businesses, including projects in Brazil, Puerto Rico, Jamaica, Mexico, Nicaragua, FLNG [floating liquified natural gas] 1 in Mexico, and Klondike,” NFE said. “The company expects to explore with potential strategic partners financings, commercial ventures or asset sales that are intended to enhance the company’s liquidity and financial flexibility. The company cannot provide assurance that its exploration will result in pursuing a transaction or that any transaction, if pursued, will be completed on attractive terms.”
The news comes amid financial problems faced by the company. Kailix Advisors LLC reduced its position in shares of NFE by 61.4% in the third quarter, according to the company in its most recent filing with the SEC. The institutional investor owned 851,439 shares of the company’s stock after selling 1,352,385 shares during the quarter.
At its recent third quarter earnings call, NFE reported Q3 adjusted earnings before interest, taxes, depreciation and amortization of $176 million, aligning with previous forecasts.
However, on the negative side, NFE said it reduced its Q4 guidance due to maintenance issues affecting FLNG volumes, indicating potential operational challenges.
The resolution of a Federal Emergency Management Agency claim in Puerto Rico remains pending, creating uncertainty around its financial impact.
The company’s ability to forecast away from operations is complex, NFE said, due to large individual transactions and strategic options. NFE’s Puerto Rico operations are currently underutilized, with a significant gap between potential and actual gas supply. The company faces regulatory and administrative hurdles in Mexico, meanwhile, adversely affecting the progress of FLNG 2.
On the positive side, the company said it completed a $400 million equity raise, enhancing liquidity and extending debt maturities, allowing for strategic growth. The firm also said its Brazil construction projects are on track, with the Shell 2 plant 80% complete and the Port of Zen project ahead of schedule.
NFE’s refinancing efforts have extended debt maturities and increased corporate liquidity by $727 million, providing financial flexibility, the company noted.
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