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Last month, NFE announced that it had 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.
The company said on Wednesday that it has received “strong indications of support for the previously announced transaction, to be implemented through a UK RP, from its stakeholders, including holders and lenders representing over 95 percent of its approximately $5.8 billion principal amount of NFE’s aggregate indebtedness.”
This includes 93 percent of holders of the 2026 legacy notes, 87 percent of holders of the 2029 legacy notes, 98 percent of holders of the 2029 new notes, 100 percent of lenders of the term loan A, 88 percent of lenders of the term loan B, and 100 percent of lenders of the revolving credit facility.
To ensure all holders who intend to accede to the restructuring support agreement have ample time to submit directions via their custodians, the company extended the deadline for creditors to accede to the RSA to 5:00 pm, New York City time, on April 8, NFE said.
As previously announced, the company expects to launch the UK RP process in April and the transaction is expected to be completed by the third quarter of 2026, subject to court availability, customary conditions, and regulatory approvals.
Two independent entities
Under the terms of the RSA, the first step is to separate NFE into two independent entities.
These include “BrazilCo”, a privately held, standalone company to be owned by creditors, 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.
Also, NFE said the creditor groups will exchange their debt instruments for a basket of “New NFE” debt, preferred equity, and common shares.
In aggregate, the transaction will result in the reduction of “New NFE” corporate debt from $5.7 billion to $527.5 million, the issuance of up to $2.5 billion of “New NFE” preferred equity, and the issuance of 65 percent of “New NFE” common equity.
Moreover, existing NFE shareholders will have their ownership diluted to 35 percent 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.
