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Facing noticeable liquidity challenges, New Fortress Energy Inc. (NFE), the parent organization of Genera PR, which operates the legacy power plants of the Puerto Rico Electric Power Authority, is in search of collaborators for its main operations.
In a filing submitted to the Securities and Exchange Commission (SEC), NFE revealed a set of financing initiatives that are aimed at boosting the company’s liquidity and financial maneuverability upon completion.
“To further these aims, the Company has initiated efforts to find strategic partners for one or more of its key businesses, such as projects in Brazil, Puerto Rico, Jamaica, Mexico, Nicaragua, FLNG [floating liquified natural gas] 1 in Mexico, and Klondike,” NFE stated. “The firm anticipates exploring financings, joint ventures, or asset divestitures with potential strategic allies, all intended to enhance the company’s liquidity and financial maneuverability. The company cannot guarantee that its inquiries will lead to a transaction or that any potential transaction will be finalized under favorable conditions.”
This announcement arrives at a time when the firm is grappling with financial difficulties. Kailix Advisors LLC reduced its stake in NFE shares by 61.4% during the third quarter, based on the company’s latest SEC filing. The institutional investor held 851,439 shares after divesting 1,352,385 shares through the quarter.
During its recent third quarter earnings conference, NFE reported adjusted earnings before interest, taxes, depreciation, and amortization of $176 million for Q3, consistent with earlier projections.
Conversely, NFE indicated a reduction in its Q4 forecast due to maintenance challenges impacting FLNG volumes, hinting at possible operational issues.
Additionally, a pending claim with the Federal Emergency Management Agency in Puerto Rico remains unresolved, adding to the uncertainty of its financial implications.
NFE stated that forecasting outside of operations is complicated due to significant single transactions and strategic possibilities. The company’s operations in Puerto Rico are currently underutilized, revealing a considerable discrepancy between potential and actual gas supply. Furthermore, NFE faces regulatory and administrative challenges in Mexico, which hinder the advancement of FLNG 2.
On a brighter note, the company mentioned it successfully completed a $400 million equity raise, improving liquidity and prolonging debt maturities, which paves the way for strategic expansion. The organization also reported that its construction projects in Brazil are progressing according to schedule, with the Shell 2 plant 80% finished and the Port of Zen project ahead of its timeline.
NFE pointed out that its refinancing efforts have postponed debt maturities and raised corporate liquidity by $727 million, thus providing financial flexibility.
