NFE's Forbearance and Missed Interest Payment Confirm Severe Financial Distress

What happened

New Fortress Energy's bullish case has long hinged on long-term deals like one with the Puerto Rican government, but recent events have exposed deeper issues. The company missed a $163.8 million interest payment on its 2029 notes and entered forbearance, directly signaling liquidity and solvency problems. This aligns with the deep value report's findings of extreme leverage, with net debt/EBITDA at 28x, negative interest coverage, and a going-concern warning from auditors. Operational performance has deteriorated, with 9M25 revenue down sharply and over $1 billion in net losses, while liquidity is thin at $145 million cash against $6.6 billion current debt. Consequently, NFE's equity now resembles a distressed lottery ticket, with high risk of permanent capital loss despite potential upside from project completions.

Implication

The missed interest payment and forbearance underscore NFE's inability to meet debt obligations, raising immediate solvency concerns that overshadow any long-term bullish narratives. With auditors flagging going-concern risks and liquidity insufficient for near-term maturities, common equity holders face significant dilution or total loss in a potential restructuring. Operational deterioration, including revenue declines and cash burn, further negates short-term investment appeal, despite the company's asset base. The stock's 90% decline over 12 months reflects embedded distress expectations, but further downside is plausible if forbearance expires or key projects falter. Only high-risk speculators might consider NFE as a binary bet on successful balance-sheet repair, but for most investors, the risk/reward remains skewed against common shareholders.

Thesis delta

The news article's confirmation of missed interest payments and forbearance directly supports the deep value report's existing STRONG SELL thesis, with no material shift. This reinforces the view that NFE's equity is highly speculative, functioning as a distressed option rather than a stable investment. Investors should maintain caution, as the financial instability highlighted in both sources increases the probability of restructuring and equity wipeout.