NEW YORK - New Fortress Energy Inc. (NASDAQ: NASDAQ:NFE), an energy infrastructure company, has announced the pricing of its public offering of 46,349,942 shares of Class A common stock at $8.63 each. The transaction is expected to finalize on October 2, 2024, pending customary closing conditions.
Wesley R. Edens, New Fortress Energy's Chairman and CEO, has committed to purchasing 5,793,742 shares at the public offering price, aligning with the terms offered to other buyers. Notably, the underwriters will not receive an underwriting discount on shares bought by Edens.
The proceeds from this offering are designated for general corporate purposes. Morgan Stanley & Co. LLC is serving as the joint book-running manager in collaboration with other syndicate members.
The offering is made under the Company's shelf registration statement already on file with the Securities and Exchange Commission (SEC). Interested investors are encouraged to review the prospectus and other relevant documents filed with the SEC for more detailed information about the Company and this offering.
New Fortress Energy, with a focus on addressing energy poverty and supporting the global transition to clean energy, operates natural gas and liquefied natural gas (LNG) infrastructure, alongside an integrated fleet of ships and logistics assets to provide turnkey energy solutions worldwide.
The press release includes forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These statements are based on current information, and actual results could differ materially. The Company does not undertake any obligation to update forward-looking statements, even as circumstances change.
This press release, based on a press release statement, should not be considered an offer to sell or a solicitation of an offer to buy common stock. Sales of these securities will not be made in jurisdictions where such offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of any such jurisdiction.
In other recent news, New Fortress Energy has been a topic of discussion among several analyst firms. Deutsche Bank downgraded the company's stock from Hold to Sell and reduced the price target to $7.60, citing anticipated equity dilution and reassessment of risks. This decision followed the company's announcement about a requirement to secure a binding commitment for its 6.75% Senior 2025 Notes and execute the sale of $250 million in common or convertible preferred equity. BTIG, on the other hand, maintained a Buy rating on the stock but reduced its price target to $15.00.
New Fortress Energy has also amended its credit agreements, imposing new financial covenants and suspending certain others. This includes maintaining a minimum liquidity balance of $50 million at the end of each month and $100 million at the end of each fiscal quarter. The company is also prohibited from declaring any future dividends on common stock.
Among these recent developments, the company reported a Q2 2024 EBITDA of $120 million, falling short of the targeted $275 million due to delays in deploying the FLNG (OL:FLNG) 1 asset. However, the company now expects this asset to generate $500 million in annual free cash flow. Despite the initial setback, the company projects a positive outlook with quarterly earnings of $275 million for the rest of the year and an annual EBITDA range between $1.4 billion and $1.5 billion.
InvestingPro Insights
New Fortress Energy's recent public offering of 46,349,942 shares at $8.63 each comes at a time when the company is facing significant financial challenges. According to InvestingPro data, NFE's stock has experienced a substantial decline, with a 71.72% drop in the one-year price total return as of the latest available data. This offering price is notably lower than the company's fair value of $21 USD, as estimated by analyst targets.
The company's financial position appears precarious, with InvestingPro Tips indicating that NFE is quickly burning through cash and operating with a significant debt burden. These factors may have contributed to the need for this public offering to raise capital for general corporate purposes.
Despite these challenges, NFE maintains a relatively low P/E ratio of 7.62, suggesting that the stock might be undervalued compared to its earnings. Additionally, the company offers a dividend yield of 4.4%, which could be attractive to income-focused investors.
It's worth noting that InvestingPro has identified 12 additional tips for NFE, providing a more comprehensive analysis of the company's financial health and market position. Investors interested in a deeper understanding of New Fortress Energy's prospects may find value in exploring these additional insights available through the InvestingPro product.
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