Rentech Secures $150 Million Debt Financing
13 June 2011 - 11:00PM
Business Wire
Rentech, Inc. (NYSE AMEX: RTK) today announced that Rentech
Energy Midwest Corporation (REMC), its wholly-owned nitrogen
fertilizer subsidiary, closed $150 million of debt financing.
The robust prospects of the nitrogen fertilizer market supported
REMC’s ability to significantly increase its borrowing capacity and
improve credit terms, including a lower interest rate. The new term
loan requires periodic amortization payments, and has a final
maturity date of June 10, 2016. Credit Suisse Securities (USA) LLC
was the sole arranger of the loan.
The debt financing replaces REMC’s outstanding term loan of
approximately $85 million. Pro forma for the new loan, Rentech’s
consolidated cash balance as of March 31, 2011 would have been
approximately $124 million, with approximately $20 million held at
REMC. Upon closing of the debt financing, Rentech received a
distribution of approximately $67 million, composed of net
financing proceeds of approximately $47 million and $20 million of
excess cash that was available at REMC. A reconciliation of
Rentech’s pro forma consolidated cash balance to its actual cash
balance as of March 31, 2011 is included below in this press
release.
With the increased liquidity, Rentech is well positioned to fund
continued development of the Company’s synthetic fuels and power
projects and other corporate needs.
“The significant increase in REMC’s borrowing capacity and the
improved terms of the credit agreement reflect the credit market’s
confidence in REMC’s outlook. The resulting strong liquidity
position provides Rentech with a significant amount of capital to
pursue commercial opportunities to increase shareholder value,”
said Dan Cohrs, Executive Vice President and Chief Financial
Officer of Rentech. Mr. Cohrs continued, “Rentech’s management is
enthusiastic about the prospects of REMC, which benefits from
strong industry fundamentals and premium product pricing, due to
its location in the heart of the Corn Belt.”
Disclosure Regarding Non-GAAP Financial Measures
Management believes that including the Company’s pro forma
consolidated cash balance will provide investors with additional
information regarding the Company’s liquidity on a consolidated
basis. A reconciliation of the Company’s consolidated cash balance
as of March 31, 2011 to its pro forma cash balance as of March 31,
2011 after giving effect to the closing of the new term loan at
REMC on June 10, 2011 is below:
Pro Forma Cash Balance Reconciliation
($ in millions) March 31, 2011 Actual Consolidated
Cash Balance: $ 77 New Term Loan-Net of Financing Fees 142
Repayment of Principal on Previous Loan (85 ) Prepayment Penalty on
Previous Loan (8 ) Accrued Interest on Previous Loan
(2 )
Pro Forma March 31, 2011 Cash Balance
$ 124
About Rentech, Inc.
Rentech, Inc. (www.rentechinc.com), incorporated in 1981,
provides clean energy solutions. The Company's Rentech-SilvaGas and
Rentech-ClearFuels biomass gasification processes can convert
multiple cellulosic biomass feedstocks into synthesis gas (syngas)
for production of renewable fuels and power. Combining the
gasification processes with Rentech's unique application of syngas
conditioning and clean-up technology and the patented Rentech
Process based on Fischer-Tropsch chemistry, Rentech offers an
integrated solution for production of synthetic fuels from
cellulosic biomass. The Rentech Process can also convert syngas
from fossil resources into ultra-clean synthetic jet and diesel
fuels, specialty waxes, and chemicals. Final product upgrading and
acid gas removal technologies are provided under an alliance with
UOP, a Honeywell company. Rentech develops projects and offers
licenses for these technologies for application in synthetic fuels
and power facilities worldwide. Rentech Energy Midwest Corporation,
the Company's wholly-owned subsidiary, manufactures and sells
nitrogen fertilizer products including ammonia, urea ammonia
nitrate, urea granule, and urea solution in the corn-belt region of
the central United States.
Safe Harbor Statement
This press release contains forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995
about matters such as the outlook of Rentech Energy Midwest
Corporation; the demand, pricing and outlook for REMC’s products;
the anticipated use of proceeds from the debt financing; the
projected flexibility and liquidity of the Company; and the
financial returns and impact of commercial projects. These
statements are based on management's current expectations and
actual results may differ materially as a result of various risks
and uncertainties. Other factors that could cause actual results to
differ from those reflected in the forward-looking statements
include the possibility that Rentech may elect to pursue activities
beyond its current budget, the possibility that Rentech may be
unable to raise the additional capital necessary to finance such
additional activities or the completion of its proposed projects,
fluctuations in commodities prices including the price of oil and
the materials necessary to construct projects, the impact of
changing government regulations on the project permitting process,
the qualification of renewable power and fuels and market demand
and pricing for REMC’s products and factors set forth in the
Company's press releases and periodic public filings with the
Securities and Exchange Commission, which are available via
Rentech's web site at www.rentechinc.com. The forward-looking
statements in this press release are made as of the date of this
release, and Rentech does not undertake to revise or update these
forward-looking statements, except to the extent that it is
required to do so under applicable law.
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