LNG Distributor Poised for Post-Shutdown IPO

New Fortress Energy is seeking to raise $300 million, most of which would go toward building LNG infrastructure.
Matthew HellerJanuary 28, 2019
LNG Distributor Poised for Post-Shutdown IPO

Liquefied natural gas distributor New Fortress Energy is seeking to raise $300 million as the IPO pipeline starts flowing again after the partial government shutdown.

In an amended prospectus, New Fortress said it would offer 20 million shares at $15 per share, slimming down its original plan to offer 22 million shares at between $17 and $19 each. The amendment followed the company’s nine-day roadshow.

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The NASDAQ listing would make New Fortress one of the first companies to go public since the shutdown — which had put IPOs on hold due to staff shortages at the U.S. Securities and Exchange Commission — ended on Friday.

“With a potential 3.75 billion LNG-gallon-per-day addressable market created by the approximately 1.5 million MW of new power expected to be needed by 2040 … we see multiple opportunities for our business to grow,” New Fortress said in its prospectus.

New Fortress, which provides integrated LNG services ranging from natural gas liquefaction to transportation, is controlled by Wesley Edens, the founder of private equity firm Fortress Investment Group and co-owner of the NBA’s Milwaukee Bucks.

The company currently operates a liquefaction facility in Miami and a distribution terminal in Montego Bay, Jamaica. It has plans to develop five other terminals in Jamaica, Puerto Rico, Mexico, Ireland, and the Dominican Republic.

Although demand for LNG is expected to reach 450 million tons per year, approximately 740 million gallons per day, by 2025, New Fortress expects there will be a shortfall in supply of about 200 mtpa versus current operating plants and 100 mtpa versus projects under construction.

“We plan to capitalize on this growing supply-demand gap and create new markets for natural gas by developing liquefaction assets,” the prospectus said.

According to Crain’s New York Business, New Fortress will need “to persuade investors to look past the fact [it] is losing a lot of money and carries a lot of debt.” The company’s losses more than doubled to $43 million on revenue of $81 million in the nine months ending Sept. 30 and it carries $122 million in long-term debt.