NFE and Apollo funds agree to form a new joint venture for LNG maritime infrastructure; transaction valued at approximately $2 billion
July 5, 2022
In the news
NEW YORK--(BUSINESS WIRE)--New Fortress Energy Inc. (NASDAQ: NFE) (“NFE”) and Apollo (NYSE: APO) today announced that they have entered into a definitive Equity Purchase and Contribution Agreement (the “Purchase and Contribution Agreement”) to sell 11 LNG infrastructure vessels owned by NFE to a newly formed joint venture (the “JV” or the “Platform”) between funds managed by Apollo and NFE in a transaction valued at approximately $2 billion. The JV will be owned approximately 80% by Apollo funds and 20% by NFE.
This transaction will 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 leading investment and maritime experience. The Platform provides critical infrastructure for the delivery, storage, and regasification of liquefied natural gas (“LNG”) to power countries around the world, which can reduce their reliance on oil and coal to lower carbon emissions while enabling potentially substantial cost savings. In addition to serving NFE’s projects globally, the Platform also serves a diversified customer base of utilities and energy companies worldwide under third-party charters.
The 11-vessel portfolio consists of 6 Floating Storage and Regasification Units (“FSRUs”), 2 LNG Carriers (“LNGCs”), and 3 Floating Storage Units (“FSUs”). The total implied enterprise value of the transaction is approximately $2 billion, and NFE will receive approximately $1.1 billion in proceeds after accounting for NFE’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. The Platform will also seek growth opportunities in support of both NFE and third parties to support the energy transition and bolster energy security globally.
“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,” said Wes Edens, Chairman and CEO of New Fortress Energy. “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.”
Apollo Partner Brad Fierstein said, “Energy transition and energy reliability are global priorities and core to Apollo’s sustainable investing platform. We’re pleased to further these initiatives through this long-term investment alongside our JV partners at New Fortress Energy. 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.”
Subject to satisfying customary closing conditions, including receipt of certain regulatory approvals and third-party consents, closing of the transaction is expected to occur in Q3 of 2022. Transaction proceeds are expected to be utilized to fund NFE’s FLNG projects, as well as for ongoing downstream infrastructure and general corporate purposes.
About New Fortress Energy
New Fortress Energy Inc. (NASDAQ: NFE) is a global energy infrastructure company founded to help address energy poverty and accelerate the world’s transition to reliable, affordable, and clean energy. The company owns and operates natural gas and liquefied natural gas (LNG) infrastructure, ships and logistics assets to rapidly deliver turnkey energy solutions to global markets. Collectively, the company’s assets and operations seek to support global energy security, enable economic growth, enhance environmental stewardship, and transform local industries and communities around the world.
Apollo is a high-growth, global alternative asset manager. In our asset management business, we seek to provide our clients excess return at every point along the risk-reward spectrum from investment grade to private equity with a focus on three investing strategies: yield, hybrid, and equity. For more than three decades, our investing expertise across our fully integrated platform has served the financial return needs of our clients and provided businesses with innovative capital solutions for growth. Through Athene, our retirement services business, we specialize in helping clients achieve financial security by providing a suite of retirement savings products and acting as a solutions provider to institutions. Our patient, creative, and knowledgeable approach to investing aligns our clients, businesses we invest in, our employees, and the communities we impact, to expand opportunity and achieve positive outcomes. As of March 31, 2022, Apollo had approximately $513 billion of assets under management. To learn more, please visit www.apollo.com.