Apollo and New Fortress Energy (NFE) agreed to a definitive equity purchase and to sell 11 LNG infrastructure vessels owned by NFE to a newly formed JV between funds owned by Apollo and NFE in a deal valued at approximately $2 billion.
The JV will be owned approximately 80% by Apollo funds and 20% by NFE.
“Energy transition and energy reliability are global priorities and core to Apollo’s sustainable investing platform,” said Apollo Partner Brad Fierstein. “We’re pleased to further these initiatives through this long-term investment alongside our JV partners at New Fortress Energy.”
He described the portfolio as one that should accelerate decarbonization efforts in facilitating LNG use, which is cleaner and more affordable than diesel.
Officials said the transaction will create a global marine infrastructure platform that will benefit from NFE’s LNG downstream operations and development activities, as well as Apollo’s leading investment and maritime experience.
“Together with Apollo, we are creating a leading LNG marine infrastructure platform to help accelerate the energy transition while freeing up capital to continue to invest into our Fast LNG and downstream LNG projects worldwide,” said Wes Edens, chairman and CEO of New Fortress Energy.
NFE owns and operates natural gas and LNG infrastructure, ships and logistics assets to rapidly deliver turnkey energy solutions to global markets.
The 11-vessel portfolio consists of six Floating Storage and Regasification Units, two LNG Carriers, and three Floating Storage Units. 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. The JV platform will also seek growth opportunities in support of both NFE and third parties to support the energy transition and bolster energy security globally.
The JV transaction is expected to happen next quarter with the proceeds going to NFR’s FLNG projects as well as for ongoing downstream infrastructure and general corporate purposes.
