New Fortress Energy’s Strategic Asset Divestiture to Alleviate Debt

New Fortress Energy is undertaking asset sales, particularly in Jamaica, to reduce its US$9 billion debt after reporting a US$234 million loss for 2024. With plans to raise US$2 billion, the company highlights strong operational profits from Jamaican assets and intends to leverage this strength for financial recovery.

New Fortress Energy (NFE) reported a significant loss of US$234 million for the fiscal year ending December 2024. In response, the company is taking steps to manage its heavy debt load, which stands at US$9 billion, by selling assets in Jamaica, Brazil, and its shipping charters. NFE aims to raise approximately US$2 billion through these sales, with its Jamaican assets identified as a priority.

Wes Edens, Chairman and CEO of New Fortress, highlighted the vital role of Jamaican operations during an investor conference call, noting their annual operational profit of US$125 million. Edens remarked, “Jamaica is the country where we went first. It’s our oldest and most developed market,” showcasing the long-standing relationship NFE has cultivated in Jamaica’s energy sector.

The company operates three main facilities in Jamaica: Montego Bay, Old Harbour, and Hayes. The Montego Bay facility processes up to 60,000 MMBtu of LNG daily and supplies natural gas to Jamaica Public Service Company (JPS) under a long-term contract. Meanwhile, the Old Harbour facility, running since June 2019, is capable of handling 750,000 MMBtu daily and supports local power generation through a partnership with JPS.

Edens emphasized the resilience of their Jamaican assets, which have “never suffered a dollar of credit loss” in their history, characterizing them as outstanding investments. The ongoing management process started in the fourth quarter of the previous year, demonstrating NFE’s commitment to strategic asset optimization. Recently, the company has seen profits increasing significantly, closing the year with US$966 million in cash, reflecting a substantial rise from the previous year’s US$311 million.

In summary, New Fortress Energy is making significant strides to mitigate its debt burden through strategic asset sales, particularly in Jamaica. By capitalizing on their established operations, which provide considerable cash flow and stability, NFE aims to secure necessary funds while transitioning to a healthier financial position. Their focus on long-term contracts and proven market performance signals confidence in the sustainability and profitability of their investments.

Original Source: jamaica-gleaner.com