US LNG player New Fortress Energy said it would sell 11 vessels to a new joint venture it formed with compatriot asset manager Apollo.
In that regard, NFE and funds managed by Apollo entered into a definitive equity purchase and contribution agreement to sell the vessels to the JV in a transaction valued at about $2 billion, according to a statement on Tuesday.
Also, Apollo funds will own 80 percent of the JV while NFE will hold the rest.
NFE said this this transaction would create a global marine infrastructure platform underpinned by long-term contracts, benefitting from NFE’s LNG downstream operations and development activities, as well as Apollo’s investment and maritime experience.
The 11-vessel portfolio consists of six floating storage and regasification units (FSRUs), two LNG carriers, and three floating storage units.
Under the $2 billion deal, NFE will receive about $1.1 billion in proceeds after accounting for the company’s share of the JV and paydown of existing debt.
As part of the transaction, NFE has agreed to charter 10 of the 11 of the vessels from the platform for a period of up to 20 years commencing either upon close of the transaction or upon expiration of the vessels’ existing third-party charter agreements, it said.
The platform would also seek growth opportunities in support of both NFE and third parties to support the energy transition and bolster energy security globally, it said.
Creating a “leading” LNG marine infrastructure platform
“Together with Apollo, we are creating a leading LNG marine infrastructure platform to help accelerate the energy transition while freeing up capital to continue to invest into our Fast LNG and downstream LNG projects worldwide,” Wes Edens, chairman and CEO of NFE, said.
“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,” he said.
The transaction remains subject to satisfying customary closing conditions, including receipt of certain regulatory approvals and third-party consents.
NFE said it expects closing of the transaction to occur in the third quarter of 2022.
Also, the firm said it plans to utilize transaction proceeds to fund its FLNG projects, as well as for ongoing downstream infrastructure and general corporate purposes.