Special Update - New Fortress Energy
Liquidation Game
Introduction to New Fortress Energy
New Fortress Energy is a company specialized in natural gas infrastructure, focusing on developing countries. It operates across the entire value chain (upstream, midstream, and downstream) and has been one of the most interesting stories in the markets over the past five years.
Since its IPO in 2019, the company has grown rapidly, increasing its revenues tenfold in five years. It peaked in 2022, when record TTF prices in Europe allowed it to capitalize on the price gap by exporting U.S. LNG cargos, but even 2023 was a strong year with two excellent contracts in Puerto Rico. However, in recent months, continued delays and cost overruns in its projects, along with operational issues in Puerto Rico and its extremely high debt levels, have pushed it to a breaking point — first with a painful capital increase and debt refinancing, and now with asset sales below market value, as its peers are well aware of the pressure it's under due to the heavy interest expenses it must cover after the refinancing.
At MORAM Capital, we have been covering the company since its IPO in 2019. You can find all our analyses explaining in detail every single aspect of the company — including the most recent one with a breakdown of the Jamaica transaction. along with the updated financial model of this company on the equity research section of our website
Today, after the company recently published some dismal 1Q25 results from an operational standpoint and carried out a veiled downgrade of its 2025 guidance — which has led to one of the strongest market reactions we’ve seen in recent years due to fears of being on the brink of bankruptcy (see the reaction of the 2026 and 2029 debt, not just the -65% in equity) — we’ve found ourselves asking what the most likely outcome is for New Fortress. Is this an overreaction by the market with a clear rebound opportunity, or is it a company doomed to bankruptcy? And if that’s the case, how much are the bonds worth?
To that end, we carried out an independent analysis, leveraging our six years of knowledge of the company and in a completely objective manner, in order to try to meet these four objectives:
Individual valuation of each of the New Fortress Energy’s assets under current conditions, replicating the exercise conducted for Jamaica six months ago, which ultimately aligned with the value paid by Excelerate Energy.
Analysis of the cost and structure of the current debt (post-refinancing & repayments with Jamaica proceeds )
Calculation of the liquidity path to the bond maturities in September 2026 and November 2029.
Company valuation (providing a downloadable spreadsheet) with the analysis, and outline our views and strategy regarding NFE.
And we believe we have met them all.