New Fortress Energy announced that it has entered into a Restructuring Support Agreement  with its creditors as part of a consensual UK Restructuring Plan , in what is expected to be one of the largest consensual UK RP restructuring transactions ever completed. Through the UK RP process, creditors will exchange NFE debt for a combination of debt, common and preferred equity. The transaction is expected to close by the third quarter of 2026, subject to court availability, customary conditions and regulatory approvals.

There are several steps to the transaction. Under the terms of the RSA, the first step is to separate NFE into two independent entities: “BrazilCo”, a privately held standalone company to be owned by creditors and is comprised of NFE’s terminals, power plants, and operations in Brazil; and “New NFE”, a publicly traded, integrated LNG-to-power company comprising all other remaining assets and operations of NFE.

The creditor groups will exchange their debt instruments for a basket of “New NFE” debt, preferred equity, and common shares. In aggregate, the following will occur through the transaction:

• Reduction of “New NFE” corporate debt from ~$5.7 billion to ~$527.5 million
• Issuance of up to $2.5 billion of “New NFE” preferred equity
• Issuance of 65% of “New NFE” common equity

The $2.5 billion of “New NFE” preferred equity issued has a three-year term with a PIK coupon of 3% in year one, 5% in year two, and 7% in year three, and is prepayable at any time without prepayment penalties. If any amount of preferred equity is outstanding at the end of year three, there is a mandatory conversion into its pro rata share of 87% of common equity of “New NFE.”

Existing NFE shareholders will have their ownership diluted to 35% of “New NFE” common equity and are subject to further dilution if some or all the preferred equity is converted at the end of year three.

“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. ‘New NFE’ will be a capital-light, low-leverage business that generates significant free cash flow, supported by long-term supply matched with long-term downstream demand. This simple business model positions ‘New NFE’ for robust growth and stability ahead with very little additional capital required. We are grateful to our creditors, advisors, customers, and shareholders for their confidence throughout this process, and we look forward to the bright future ahead for New Fortress Energy.”

The Company will launch the UK RP process in April, with the necessary court hearings to review and sanction the plan to follow. The transaction is expected to be completed by the third quarter of 2026, subject to court availability, customary conditions and regulatory approvals.

Source:BusinessWire