FTAI Infrastructure Inc. (NASDAQ:FIP), a company specializing in railroad line-haul operations, announced today its equity method investee, Long Ridge Energy & Power LLC, is proceeding with a new financing strategy. Long Ridge is refining its financial structure by replacing existing loans with a new senior secured term loan and additional secured debt financing.
The New Secured Financing is intended to refinance approximately $599 million in existing loans, manage costs associated with electricity sale derivative contracts, and cover transaction-related expenses. Long Ridge anticipates annual revenues of around $223 million and an Adjusted EBITDA of approximately $160 million post-transaction, a significant increase from FTAI's current trailing twelve-month EBITDA of $59.75 million.
These projections are based on the power plant's continued operation at 87% capacity, new electricity sale derivative contracts, and market assumptions for electricity and gas sales.
Furthermore, FTAI Infrastructure, currently valued at $864.46 million in market capitalization, is in discussions with LIF LR Holdings, LLC, an affiliate of GCM Grosvenor L.P., to acquire its 49.9% interest in Long Ridge and Long Ridge West Virginia LLC for an estimated $200 million.
The transaction is expected to be settled through equity-linked interests in FTAI Infrastructure. For deeper insights into FTAI's valuation and financial health, InvestingPro subscribers have access to comprehensive analysis and 10 additional ProTips. However, the outcome of these discussions and the potential transaction's completion remain uncertain.
This strategic move comes after the subsidiary's announcement on November 25, 2024, regarding the planned refinancing. With the stock showing significant volatility and trading at a high EBITDA multiple of 44.17x, FTAI Infrastructure's decision to update its financial approach reflects an ongoing effort to optimize its capital structure and enhance shareholder value.
The company has cautioned that the forward-looking statements provided are subject to various factors and uncertainties that could cause actual results to differ materially from those projected. These include potential changes in market conditions, regulatory landscapes, and operational challenges.
Investors are advised that this information, based on a press release statement, is not a guarantee of future performance and actual outcomes may vary significantly from the targets outlined.
In other recent news, FTAI Infrastructure reported a record adjusted EBITDA of $36.9 million for Q3 2024, a substantial increase of 50% year-over-year.
The company also announced a quarterly dividend of $0.03 per share. FTAI Infrastructure's total annual EBITDA is projected to reach approximately $220 million, with potential growth to over $300 million due to new business opportunities.
FTAI Infrastructure Inc. also disclosed that one of its equity method investees, Long Ridge Energy & Power LLC, is seeking to refinance its existing loans with a new senior secured term loan. Long Ridge is aiming to refinance approximately $600 million of existing loans, terminate certain electricity sale derivative contracts, and enter into new ones. The subsidiary is targeting annual revenues of around $226 million and an Adjusted EBITDA of approximately $160 million after completing these transactions.
Key segments such as Transtar, Jefferson, Repauno, and Long Ridge are contributing to this growth, with new contracts and refinancing plans expected to enhance future cash flow. For instance, Jefferson's new contracts are expected to contribute an additional $20 million annually from 2025. In addition, Repauno's Phase 2 transloading contract is projected to add $60-70 million annually upon completion.
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