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(Bloomberg) — Billionaire Wes Edens’ New Fortress Energy Inc. has finalized a seven-year deal worth $4 billion to supply liquefied natural gas to Puerto Rico, the governor confirmed on Tuesday, giving the financially-strained company a shot in the arm.
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Stocks for the New York-based energy firm surged the most since mid-June, with shares rising more than 30% during intra-day trading. Bonds for New Fortress Energy debt also jumped the most on the report of the contract news.
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This interim agreement caps months of tumultuous negotiations to renew a longterm agreement for LNG to Puerto Rico, which relies on energy imports for its power demand. The final deal still requires final approval from the Financial Oversight and Management Board, an agency that was nearly gutted by President Donald Trump last month.
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The deal will provide a much-needed boost for New Fortress, which has struggled to turn a profit and is facing a debt crunch, worsened by delays at a Mexico LNG export facility and the Puerto Rico uncertainty.
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Terms also include a three-year extension, as well as a provision that would allow the government to use the LNG terminal in San Juan if New Fortress Energy could not deliver the fuel.
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“After an exhaustive negotiation, we were able to substantially modify the agreement with NFE, which provides notable savings for the treasury and more protection for the people,” Governor Jenniffer Gonzalez said in a statement. “This is about getting the best deal for the people of Puerto Rico.”
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A spokesperson for New Fortress Energy did not immediately respond to a request for comment.
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The contract announcement comes after advisers to New Fortress Energy creditors prepare for confidential debt talks, Bloomberg News previously reported.
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