New Fortress Energy Enters Landmark Restructuring Support Agreement to Transform Operations and Balance Sheet
New Fortress Energy Inc. (NASDAQ: NFE) (“NFE” or the “Company”) announced today that it has entered into a Restructuring Support Agreement (“RSA”) with its creditors as part of a consensual UK Restructuring Plan (“UK RP”). The proposed restructuring is poised to become one of the largest consensual UK RP transactions ever completed, marking a significant milestone in the Company’s strategic evolution.
The UK RP framework will enable NFE to exchange existing debt obligations for a combination of new debt instruments, preferred equity, and common equity. This process is designed to strengthen the Company’s balance sheet, improve liquidity, and position the business for sustainable long-term growth. The transaction is expected to close by the third quarter of 2026, contingent on court scheduling, customary closing conditions, and regulatory approvals.
Strategic Steps in the Restructuring
Under the terms of the RSA, the initial step involves separating NFE into two distinct entities. The first, “BrazilCo,” will be a privately held standalone company owned by the creditors. BrazilCo will encompass NFE’s terminals, power plants, and operations in Brazil, providing a focused platform for growth within the country’s energy market.
The second entity, referred to as “New NFE,” will remain publicly traded and operate as an integrated LNG-to-power company, comprising the remaining NFE assets and operations. This separation is intended to simplify the business structure, reduce operational complexity, and enhance investor transparency while creating two companies better aligned with their respective markets and operational priorities.
Once the separation is complete, creditor groups will exchange their existing debt instruments for a combination of New NFE debt, preferred equity, and common equity. The key components of the restructuring include:
- Significant Debt Reduction: New NFE’s corporate debt will be reduced from approximately $5.7 billion to around $527.5 million, dramatically lowering leverage and financial risk.
- Preferred Equity Issuance: Up to $2.5 billion of New NFE preferred equity will be issued. This preferred equity has a three-year term with a Payment-in-Kind (PIK) coupon of 3% in the first year, 5% in the second, and 7% in the third year. The preferred equity is prepayable at any time without penalty, offering financial flexibility. If any portion remains outstanding at the end of year three, it will be mandatorily converted into a pro rata share of 87% of New NFE common equity.
- Common Equity Allocation: Creditors will receive 65% of New NFE common equity, while existing shareholders will retain 35%, subject to potential dilution if the preferred equity converts at the end of the third year.
A Capital-Light, Growth-Oriented Model
“This consensual restructuring represents a landmark milestone for the company,” said Wes Edens, Chairman and CEO of New Fortress Energy. “New NFE emerges from this transaction as a fundamentally transformed company. It will operate as a capital-light, low-leverage business that generates significant free cash flow, supported by long-term supply agreements paired with downstream demand. The simplicity of this model positions New NFE for robust growth and operational stability, requiring minimal additional capital investment.”
Edens emphasized the strategic benefits of the restructuring, highlighting that the separation of BrazilCo and New NFE will allow each entity to focus on its respective markets and operational strengths. “BrazilCo will provide our creditors with a strong standalone platform in Brazil’s energy sector, while New NFE will continue to grow as a streamlined, integrated LNG-to-power company,” he said.
Stakeholder Collaboration and Confidence
The restructuring process reflects a high degree of collaboration among NFE’s stakeholders. Creditors, advisors, customers, and shareholders have all contributed to the development and approval of the RSA and UK RP, demonstrating confidence in the Company’s strategic direction and future prospects.
“This restructuring is a testament to the trust and partnership we have built with our stakeholders,” Edens noted. “Their support has been instrumental in shaping a path forward that ensures long-term value creation for all parties involved.”
Timeline and Next Steps
The Company plans to officially launch the UK RP process in April 2026, with subsequent court hearings to review and sanction the plan. Subject to court availability, customary conditions, and regulatory approvals, NFE anticipates completing the transaction by the third quarter of 2026.
During this period, NFE will continue its day-to-day operations while preparing for the transition into the two newly formed entities. Both BrazilCo and New NFE are expected to emerge financially stronger, more operationally focused, and better positioned to execute on their respective growth strategies.
Outlook for New NFE
Post-restructuring, New NFE is expected to be highly resilient, benefiting from reduced leverage and enhanced liquidity. Its capital-light model and focus on integrated LNG-to-power operations create a framework for sustainable free cash flow generation and strategic flexibility. Long-term supply agreements, combined with predictable downstream demand, are expected to provide stability and support the Company’s growth objectives over the coming years.
Furthermore, the structure of the preferred equity issuance offers both creditors and shareholders clarity regarding the potential conversion into common equity, ensuring alignment of interests across stakeholders. This arrangement also provides existing shareholders with continued participation in New NFE’s future growth while reflecting the necessary capital restructuring to strengthen the Company’s financial foundation.
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