New Fortress Energy (NFE) and Apollo have entered into a definitive Equity Purchase and Contribution Agreement to sell 11 LNG infrastructure vessels owned by NFE to a newly formed joint venture (JV) 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), two LNG Carriers (LNGCs), and three 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.
