New Fortress Energy Wins Debt Reprieve Amid Restructuring
(Bloomberg) -- Wes Edens’ New Fortress Energy Inc. struck an agreement with creditors to delay interest payments on some of its borrowings, as it continues to navigate a debt burden amid project delays and dwindling cash flow.
The forbearance agreement pushes back the due date for interest payments on its 2029 senior-secured notes from Monday to Dec. 15, according to a company statement. Bloomberg earlier reported that the firm was in discussions with creditors for the agreement.
The company expects to “continue to work constructively with the company’s stakeholders” during the forbearance period, it said in its statement.
The agreement would give the liquefied natural gas operator more time to hammer out a restructuring plan with creditors, people familiar with the matter said, asking not to be identified discussing private information. The firm has struggled as delayed projects hamstrung its cash flow, heaping more pressure on its already distressed debt.
The company’s shares were down about 1% to just over a $1 at 10:34 a.m. in New York on Tuesday after paring some earlier losses. They are down more than 90% so far this year.
New Fortress is considering restructuring its borrowings through a UK process known as a scheme of arrangement, Bloomberg previously reported.
The $2.7 billion of 12% secured notes changed hands at nearly 22 cents on the dollar last week, a sharp decline from 94 cents in late March, according to pricing firm Trace. Non-payment of interest can result in an event of default, which allows creditors to accelerate principal payments and pushes a company into the bankruptcy process. The company’s $1.27 billion term loan maturing in 2028 was quoted at around 44.6 cents Monday, according to data compiled by Bloomberg.
Earlier: New Fortress Energy Mulls UK Restructuring Over Chapter 11 (1)
Multiple creditor groups have formed amid the company’s struggles. A group of New Fortress debtholders have engaged Evercore Inc. and Akin Gump Strauss Hauer & Feld, while other creditors are getting advice from Perella Weinberg Partners and Paul Weiss Rifkind Wharton & Garrison, Bloomberg has reported. Law firm Paul Hastings is working with a group holding its 6.5% secured bonds due in 2026 and its 8.75% bonds maturing in March 2029.
(Updates with company statement from first paragraph.)
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