Who Controls Puerto Rico’s Power Now?

New Fortress Energy Inc. has finalized a sweeping restructuring that reshapes the company’s global footprint, sharply reduces its funded debt, and transfers significant ownership stakes, including those tied to Puerto Rico’s power-generation assets, to creditors.

The transaction closed on September 11, according to a Form 8-K filed with the U.S. Securities and Exchange Commission.

The restructuring is significant for Puerto Rico because it shifts effective control of Genera PR, the company’s Puerto Rico subsidiary that manages the island’s generation fleet under contract with the Puerto Rico Electric Power Authority (PREPA), into the hands of creditors rather than the company’s traditional shareholder base.

Under the new capital structure, debt holders now hold controlling stakes in the entity that operates the company’s Puerto Rico operations, raising questions about how energy decisions affecting the island’s power costs and infrastructure will be made going forward.

What that means for Puerto Rico’s energy landscape remains an open question. Creditor-controlled infrastructure companies often prioritize debt repayment and return on investment over capital expenditure or operational expansion, at a time when this newspaper is reporting a massive gap in the generation needed to avoid frequent outages and secure long-term stability.

The shift raises questions about how Genera PR will approach negotiations with PREPA, whether creditors will push for rate adjustments to improve margins, and what capital investment strategy the company will pursue under new ownership.

The restructuring, sanctioned by the High Court of Justice of England and Wales and recognized by the U.S. Bankruptcy Court under Chapter 15, divides the company into two independent entities.

BrazilCo now holds all of New Fortress Energy’s Brazil-based businesses, while CoreCo retains the company’s remaining operations, including Genera PR and the floating LNG project known as FLNG 2.

This conversion will significantly reduce New Fortress Energy’s long-term economic stake in Puerto Rico’s generation fleet.

The filing states that “the Company separated into two separate independent companies” and simultaneously terminated a broad slate of senior notes and credit agreements.

Those obligations were exchanged for new CoreCo term loans, preferred equity, common stock, and interests in FLNG 2 Parent LLC. As a result, creditors now hold controlling stakes in both the Brazil business and CoreCo, the entity that owns and operates the company’s Puerto Rico-related assets.

The transaction

Under the restructuring, creditors received 65 percent of CoreCo’s common stock and all of BrazilCo’s equity. Existing shareholders were diluted to 35 percent of CoreCo. The company also issued 2.45 million shares of mandatorily convertible preferred stock that will convert into 87 percent of fully diluted CoreCo common equity in three years, further shifting ownership toward creditors.

Because Genera PR is a wholly owned subsidiary of CoreCo, this conversion will significantly reduce New Fortress Energy’s long-term economic stake in Puerto Rico’s generation fleet.

The filing makes clear that the restructuring was designed to reduce debt and stabilize operations across jurisdictions. It also underscores that the company’s Puerto Rico assets remain within CoreCo, but under a capital structure in which creditors now dominate the equity.

The company raised $136.5 million in new financing from existing creditors and established new senior and junior term-loan facilities that will govern CoreCo’s operations going forward. BrazilCo paid $74 million to CoreCo to settle intercompany obligations, further separating the two entities.

Chief Executive Officer Wesley R. Edens increased his personal stake in CoreCo by purchasing approximately $110 million of Term Loan A debt earlier in the year, receiving 208,588 shares of CoreCo common stock and 48,288 preferred shares. On the closing date, he acquired additional shares from creditors for $1.67 million. Even with these purchases, Edens’ ownership is now a minority position within a creditor-controlled structure.

The company also implemented a one-for-fifty reverse stock split, with CoreCo common stock continuing to trade under the ticker NFE. The preferred shares are expected to trade under NFEGP. CoreCo’s Puerto Rico-related operations, including the management of the island’s generation fleet under contract with PREPA, will continue under this new capital structure, but with creditors holding the majority of the economic interest.

New Fortress Energy will file pro forma financials within four business days and must submit an S-1 registration statement within ten business days to enable resale of securities issued to creditors. The company also furnished “cleansing information” to creditors regarding liquidity needs and potential future capital raises.