From The Wall Street Journal
New Fortress Energy LLC will likely attempt using a workaround to go public, a move that could allow it to wriggle into the public markets in the midst of the partial U.S. government shutdown.
The energy company had already begun its initial-public-offering roadshow with the hopes of the shutdown ending soon, according to people familiar with the matter. But with no immediate resolution yet at hand, the company has shifted its thinking and is likely to attempt going public without the Securities and Exchange Commission’s explicit green light, the people said.
The SEC has been largely closed and unable to approve IPOs.
The move New Fortress Energy is considering involves changing language in an initial-public-offering filing to make it automatically effective after 20 days. The Wall Street Journal earlier reported that two biotechnology companies have been exploring the maneuver, though some bankers and the Nasdaq Stock Market, where they plan to list, initially balked at the plan.
Still, Nasdaq hasn’t ruled it out in some cases, and some people familiar with the offerings say the exchange has recently become more receptive to deals using this workaround. The exchange is more likely to allow New Fortress Energy to move forward, according to a person familiar with the matter, because of how far along the company was in addressing the SEC’s comments before the shutdown began.
New Fortress Energy was in the late stages of preparing for its IPO when the government shut down in December. Despite the shutdown, the company refiled for the IPO earlier this month, declared a price range for its stock and launched a roadshow pitching the IPO to investors. When the firm started its roadshow last week, the hope was that the shutdown would end by the time it was ready to price its shares, a person familiar with the offering said.
Instead, New Fortress Energy is now likely to file again on Thursday, according to people familiar with the deal, changing its language and picking a target price for shares. By doing so, it will be able to sell its stock to investors 20 days later.
The practice is legal, though lawyers and bankers have said they couldn’t recall an operating company previously using this procedure to go public. In some recent cases, blank-check companies have elected to try the workaround in order to stage an IPO to raise cash for acquisitions.
