New Fortress Energy To Sell LNG Infrastructure Vessels To JV With Apollo Funds In $2 Bln Deal

New Fortress Energy Inc. (NFE), an energy infrastructure company, and alternative asset manager Apollo (APO) announced Tuesday that they have entered into a definitive Equity Purchase and Contribution Agreement.

Under the deal, NFE will sell its 11 LNG infrastructure vessels to a newly formed joint venture between funds managed by Apollo and NFE. The deal is valued at approximately $2 billion.

NFE will receive approximately $1.1 billion in proceeds after accounting for NFE’s share of the JV and paydown of existing debt.

Closing of the transaction is expected to occur in the third quarter, subject to satisfying customary closing conditions, including receipt of certain regulatory approvals and third-party consents.

Transaction proceeds are expected to be utilized to fund NFE’s FLNG projects, as well as for ongoing downstream infrastructure and general corporate purposes.

The new JV will be owned approximately 80% by Apollo funds and 20% by NFE.

The 11-vessel portfolio consists of 6 Floating Storage and Regasification Units, 2 LNG Carriers, and 3 Floating Storage Units.

As part of the deal, 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 provides critical infrastructure for the delivery, storage, and regasification of liquefied natural gas 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.

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