New Fortress Energy Warns of Bankruptcy If Other Options Fail
TL;DR
New Fortress Energy warns it may file for US bankruptcy if debt restructuring talks with lenders fail, as shares plummet and liabilities far exceed assets. The company faces doubts about its ability to continue operations due to insufficient liquidity.
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Shares of billionaire Wes Edens’ New Fortress Energy Inc. tumbled after the company warned it may seek bankruptcy protection in the US if its efforts to negotiate an out-of-court restructuring with lenders falls short.
The New York-based company that specializes in liquefied natural gas disclosed in a filing Friday that it’s also considering restructuring its debt through a court process in the UK if its push to increase liquidity and stave off accelerating debt obligations fail.
New Fortress Energy, which supplies gas to nations in the Caribbean and Latin America, has been struggling for months to pay debts as its revenue has dwindled. The company’s shares fell 13% Friday, bringing the decline over the past year to about 84%, wiping out more than $3.5 billion in equity.
The company reported nearly $8 billion in liabilities and $1.3 billion in assets in its quarterly filing on Friday. New Fortress said that current liquidity and projected cash flow from operations probably won’t be enough to meet obligations as they come due “and there is substantial doubt as to the Company’s ability to continue as a going concern.”
Earlier this week, New Fortress Energy reached an agreement with creditors to delay interest payments on some of its borrowings, giving a reprieve until mid-December for its 2029 senior-secured notes.
Bloomberg had previously reported New Fortress Energy was considering restructuring its debt through a UK process known as a scheme of arrangement.
Read More: New Fortress Energy Mulls UK Restructuring Over Chapter 11