NFE sells LNG fleet in JV with Apollo funds
LNG and gas delivery infrastructure supplier New Fortress Energy (NFE) said July 5 it had entered into a purchase and contribution agreement to sell 11 LNG marine vessels to a joint venture, started by NFE and New York-listed investor Apollo Global Management.
NFE will own roughly 20% of the shares in the new partnership, with the remaining 80% held by Apollo's investment funds. The deal is subject to customary closing conditions, certain regulatory approvals and third-party consents, but is currently on course to close in the third quarter.
NFE will redeploy the proceeds to fund internal project pipelines related to FLNG, downstream infrastructure operations and general corporate purposes.
The partners anticipate the transaction will help create a global marine infrastructure platform, underpinned by long-term contracts for the 11 vessels, 10 of which will be leased back to NFE's LNG operations.
NFE says the 11 vessel portfolio comprises six FSRUs, two LNG carriers and three floating storage units, worth a combined $2bn, in terms of the implied enterprise value of the transaction. NFE will keep around $1.1bn of the proceeds once its share of the JV costs have been factored in, and certain existing debts cleared off.
Ten of the 11 vessels will be chartered back to NFE for up to 20 years from the transaction closing or, where the ship has an existing charter, it will return to NFE once this charter has lapsed.
NFE also expects the new JV to target growth opportunities, supporting its business and third parties in their energy transition goals and allowing customers to bolster global energy security.
Wes Edens, chairman and CEO of New Fortress Energy, believes the deal lays the basis for a "leading LNG marine infrastructure platform" to be created, freeing up capital for the core NFE business to invest in its fast LNG and downstream LNG facility building segments.
"We are pleased to be partnering with Apollo in creating a maritime infrastructure company that will help support NFE's growing LNG infrastructure needs going forward," Edens said.
Apollo investment partner Brad Fierstein added: "This is a high-quality portfolio that increases energy security around the world, accelerates decarbonization efforts, and facilitates LNG use which is cleaner and more affordable than diesel. We look forward to investing behind the platform’s growth to drive a more sustainable future.”