New Fortress Energy: Restructuring Leaves Limited Option Value For Common Shares

Henrik AlexInvesting GroupFollow5ShareSavePlay(10min)Comments(7)SummaryShares of debt-laden LNG infrastructure player New Fortress Energy sold off to new all-time lows after entering into a restructuring support agreement with creditors.As part of the agreement, senior bondholders will take ownership of the company's Brazil assets, which will be spun off into an independent, privately owned company.In total, NFE will exchange more than 90% of current debt obligations for a combination of assets, new preferred stock, and additional common equity.Perhaps most disappointingly, the restructured company will be spearheaded by the very same leadership that has created the current mess.The current trading price appears disconnected from the indicated recovery for the new preferred shares. I am reiterating my "Sell" rating on NFE common shares.Looking for a helping hand in the market? Members of Value Investor's Edge get exclusive ideas and guidance to navigate any climate. Learn More » Zigmunds Dizgalvis/iStock Editorial via Getty Images Note: I have covered New Fortress Energy Inc. or "NFE" (NFE), previously, so investors should view this as an update to my earlier articles on the company. On Wednesday, shares of ailing LNG infrastructure player New Fortress Energy dropped to newThis article was written byHenrik Alex20.92K FollowersFollowI am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.Despite not being a native speaker, I always try to deliver high quality research to followers and the entire Seeking Alpha community.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.