HOUSTON - NextDecade (NASDAQ:NEXT) Corporation (NASDAQ: NEXT), a Houston-based energy company with a market capitalization of $2.14 billion, has obtained a $175 million senior secured loan through its subsidiary Rio Grande LNG Super Holdings, LLC, from General Atlantic Credit’s Atlantic Park Fund. The stock has shown remarkable momentum, gaining over 83% in the past year and currently trading near its 52-week high of $8.52. The transaction was finalized on December 31, with the loan set to mature six years from the closing date.
The funds from this loan are earmarked to repay existing financial obligations, including a $50 million revolving credit facility and a $12.5 million interest term loan. Remaining proceeds will support working capital and general corporate purposes, with a portion allocated to the development of expansion trains 4 and 5 at the Rio Grande LNG Facility. According to InvestingPro data, the company operates with a significant debt burden, with a debt-to-equity ratio of 5.17 and a current ratio of 0.49, indicating potential liquidity challenges.
The loan carries an interest rate of 12.0%, payable quarterly. For the first two years post-closing, interest may be paid in-kind, and subsequently, up to 50% can be paid in-kind. Alongside the loan, NextDecade issued approximately 7.16 million warrants to GA Credit, 50% of which are exercisable at $7.15 per share, and the remaining 50% at $9.30 per share. These warrants are valid for five years after the closing date.
NextDecade’s initiatives include the development of a 27 MTPA LNG export facility in South Texas and one of North America’s largest proposed carbon capture and storage projects. The company also aims to deploy proprietary processes to reduce CO2 emissions at industrial-scale facilities worldwide. InvestingPro analysis reveals 12 additional key insights about NextDecade’s financial health and market position, which could be crucial for investors monitoring the company’s ambitious expansion plans.
Santander (BME:SAN) served as the exclusive financial advisor, with Latham & Watkins LLP as legal advisor to NextDecade for this transaction. GA Credit received legal counsel from Akin Gump Strauss Hauer & Feld LLP and Baker Botts L.L.P.
This financing move comes as part of NextDecade’s broader strategy to lead in more sustainable LNG and carbon capture solutions, as it works towards providing cleaner energy access globally. The information is based on a press release statement from NextDecade Corporation.
In other recent news, NextDecade Corporation reported steady progress on its Rio Grande LNG project’s Phase 1, achieving 30.5% completion by September 2024. The company also secured a $4.3 billion contract with Bechtel Energy for the addition of a fourth liquefaction train at the facility. However, the project faced a regulatory setback when the Federal Energy Regulatory Commission’s reauthorization of the facility was vacated, but construction continues amid the appeals process.
NextDecade has seen significant changes in its board and operations. Arnaud Lenail-Chouteau, a seasoned professional from TotalEnergies (EPA:TTEF), has been appointed as a Class A director, filling the vacancy left by Thibaud de Préval. Additionally, Tarik Skeik has been appointed as the new Chief Operating Officer.
The company withdrew its application for a carbon capture and storage project at the Rio Grande LNG facility due to insufficient development but remains committed to advancing this technology. Analyst sentiment is divided, with Stifel maintaining a Buy rating for NextDecade, while TD Cowen retains a Hold rating. These are the recent developments in the company’s operations.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.