New Fortress Energy Proposes 90% Debt Cut, Converting $6.5B into Equity
NFE•New Fortress Energy seeks London High Court approval to convert about $6.5B of debt into equity, extinguishing 90% of obligations and issuing $971M of new debt. Creditors would take control of Brazil assets through 2029 noteholders and existing shareholders retain a 35% stake in the remaining CoreCo business.
1. Restructuring Proposal Details
New Fortress Energy has petitioned a London High Court to authorize creditor meetings on two interconnected plans that would convert $6.5 billion of outstanding debt into equity, eliminate roughly 90% of total obligations and issue $971 million in new debt instruments. The proposal has garnered 97% support from interested creditors.
2. Debt Conversion and Creditor Benefits
Under the restructuring, holders of 2029 notes would assume full ownership of the Brazil-focused unit, while other debtholders receive preferred equity and the majority of common shares in CoreCo. Expert analyses indicate creditors could recover $1.44 billion more compared to a Chapter 11 followed by asset sales.
3. Shareholder Impact and Business Split
Existing shareholders, including CEO Wes Edens, would retain a 35% equity stake in CoreCo, the post-restructuring entity overseeing non-Brazil operations. The plan bifurcates the group into a standalone Brazil business and an international operations company.
4. Rationale and Strategic Considerations
The restructuring aims to preempt bankruptcy after NFE’s market capitalization plunged about 90% over the past year due to costly delays and cash shortfalls. The choice of English courts leverages favorable restructuring provisions to stabilize operations and preserve value for stakeholders.
