New Fortress Nears Restructuring Deadline as Debt Crisis Intensifies

New Fortress Energy Inc., the U.S. liquefied natural gas (LNG) firm backed by billionaire Wes Edens, warned it may seek bankruptcy protection in the U.S. if its out-of-court debt restructuring with lenders fails. The company disclosed the risk in a recent filing, citing substantial doubt about its ability to continue as a going concern. It also revealed it is considering a U.K.-style restructuring to avoid a full-blown bankruptcy.

The company's shares fell nearly 13% on Friday, extending its year-long slide to over 84%, wiping out more than $3.5 billion in market value. New Fortress has been struggling with liquidity as its revenue has declined and interest expenses have surged, pushing the firm into a severe cash crunch. The firm now faces a critical window to reach a restructuring agreement or face insolvency.

New Fortress has $8 billion in liabilities and only $1.3 billion in assets, according to its latest quarterly filing. The firm has secured a forbearance agreement that allows it to delay interest payments on some of its debt until mid-December. However, it remains under intense pressure from creditors and rating agencies, which have downgraded its debt following a missed interest payment on $2.7 billion of 2029 senior secured notes.

A Deepening Debt Crisis

The company has been unable to secure long-term LNG supply contracts for its Latin American power assets, a challenge worsened by its weak credit rating. As a result, it has had to rely on more expensive spot gas, further eroding its already strained financial position. New Fortress has also delayed its quarterly filings and missed key compliance requirements with NASDAQ.

Fitch Ratings downgraded the company's Long-Term Issuer Default Rating to 'RD' from 'CCC' after the missed payment, a signal that the company is in default. It also downgraded several of its debt instruments to 'C' with recovery ratings. Fitch noted that New Fortress has "highly constrained" liquidity and projected leverage to exceed 15.0x through 2027, driven by its massive interest costs.

New Fortress has taken steps to extend its credit facilities and restructure its obligations. On November 14, it extended a key credit line to March 2026 and removed a minimum liquidity requirement that had previously restricted its operations. The firm is also in talks with creditors to push back a major interest payment due in mid-November https://parameter.io/new-fortress-energy-nfe-stock-after-hours-surge-follows-credit-extension-news/.

New Fortress Energy's stock plunged more than 17% in pre-market trading after news of the extended credit facility and delayed interest payment emerged. However, shares surged over 20% in after-hours trading following the announcement, fueling speculation of a potential short squeeze. Over 32% of the stock is currently shorted, according to market data, and traders on social media platforms like Stocktwits and Reddit have expressed optimism about a turnaround.

Retail traders are closely watching the stock's performance as it trades near $1 and is down over 90% this year. Some traders believe New Fortress could stage a recovery if its restructuring efforts succeed, particularly given its role in energy infrastructure. Others are betting on the short squeeze, which occurs when short sellers are forced to buy shares to cover their positions as prices rise rapidly.

Pathways to Restructuring and Risks Ahead

New Fortress is reportedly considering a U.K. scheme of arrangement as an alternative to a U.S. Chapter 11 bankruptcy. This process is less disruptive and could allow the company to maintain relationships with suppliers and customers while restructuring its debt. The company has engaged multiple financial and legal advisors to help navigate this complex process.

However, the path to restructuring is fraught with challenges. New Fortress faces upcoming debt maturities, including a $100 million revolver due in April 2026 and a $511 million in senior secured notes due in September 2026. Meanwhile, its EBITDA has fallen sharply, and its free cash flow is expected to remain negative over the next three years.

Analysts and investors are closely monitoring the firm's next moves. If New Fortress fails to secure a viable restructuring plan before the end of March 2026, it could be forced into a full bankruptcy filing, further eroding shareholder value and compounding its operational and financial difficulties https://parameter.io/new-fortress-energy-nfe-stock-after-hours-surge-follows-credit-extension-news/.