XPLR Infrastructure shares tank on distribution suspension

By Tanay Dhumal

(Reuters) - XPLR Infrastructure said on Tuesday it will suspend its distribution to unitholders for an indefinite period, sending the company's shares down 30%.

The move comes as XPLR looks to reinvest most of its cash flow to fund its renewable energy investments. Earlier it was focused on raising capital to acquire assets and distributing most of its excess cash flows to shareholders.

"The changes we are announcing today are intended to eliminate the need to issue equity," said Chairman John Ketchum.

XPLR is a limited partnership, in which U.S. utility NextEra Energy has a majority holding, and works to acquire, manage and own contracted energy projects.

XPLR also plans to use cash on hand to buy out three of its five convertible equity portfolio financings (CEPF), which refers to a portfolio of loans that can be converted to equity. It plans to sell the assets of the other two to fund their buyout.

"We are encouraged by the amount of detail and disclosure provided in the update around the company's CEPF obligations and liquidity position, though we expect the (distribution) suspension to result in a shakeout of the investor base," J.P.Morgan analysts said in note.

The company plans to invest about $945 million in 2025, $150 million in 2026 and $465 million in 2027 for the CEPF buyout, without issuing new equity.

Juno Beach, Florida-based XPLR, which was renamed from NextEra Energy Partners last week, named Alan Liu, a NextEra executive, as CEO of the firm.

Separately, NextEra Energy, reaffirmed its long-term financial expectations and added that its funding plan from 2024-2027 remains unchanged.

(Reporting by Tanay Dhumal in Bengaluru; Editing by Shailesh Kuber)