DENVER, Feb. 17 /PRNewswire-FirstCall/ -- Rentech, Inc. (Amex: RTK)
announced today that Rentech Development Corporation (RDC), its wholly owned
subsidiary, and Royster-Clark, Inc. (RCI) have amended the definitive Stock
Purchase Agreement (see Rentech release dated January 27, 2005) between them
for the purchase and sale of all the issued and outstanding shares of common
stock of Royster-Clark Nitrogen, Inc. (RCN), the owner of a 830-ton per day
natural gas-fed nitrogen fertilizer plant in East Dubuque, Illinois, to
provide for a closing date no later than March 1, 2005. Rentech announced on
January 18, 2005 that RDC had secured a commitment for up to $52 million in
Senior Secured Credit Facilities for the debt portion of the purchase.
Commenting on the amended agreement, Dennis L. Yakobson president and CEO
of Rentech, Inc. stated: "We have been working hard at achieving a financing
structure that both accomplishes the Royster-Clark Nitrogen acquisition and
provides the best overall potential future return to Rentech's shareholders.
We appreciate RCI's flexibility and willingness to give us additional time to
accomplish our goals with respect to the acquisition."
About Royster-Clark Nitrogen
RDC intends to purchase the issued and outstanding shares of common stock
of Royster-Clark Nitrogen, Inc., which assets include an 830-ton per day
natural gas-fed nitrogen fertilizer plant in East Dubuque, Illinois, from
Royster-Clark, Inc. (RCI), RCN's parent.
RDC will pay $50 million for the outstanding shares of common stock of
Royster-Clark Nitrogen, Inc., plus an estimated $13 million for net working
capital and inventory, subject to adjustment which is based on the actual net
working capital at closing in accordance with the Definitive Purchase
Agreement with Royster-Clark announced by Rentech on December 10, 2004.
Additionally, RDC and Royster-Clark Resources LLC (RCR), a subsidiary
company of RCI, in connection with the acquisition of RCN, will enter into an
exclusive Distribution Agreement appointing RCR as RDC's exclusive distributor
for the sale, purchase and resale of anhydrous ammonia, UAN solutions, nitric
acid and granular urea manufactured at the plant for agricultural and
industrial use in the United States, all subject to the terms of that
Agreement. RCI, headquartered in Norfolk, Virginia, is one of the nation's
largest retailers of fertilizer products, carrying a broad line of
agricultural products and providing services to farmers.
RDC intends to continue to operate the plant as a natural gas-fed nitrogen
plant while converting it to a coal-fed gasification process using Illinois
coal instead of expensive natural gas as its feedstock. The new and expanded
gasification process will generate the synthesis gas necessary to increase the
nitrogen fertilizer production in addition to Fischer-Tropsch (FT) ultra-clean
fuels and surplus electricity. RDC estimates that it will take approximately
three and one-half years to convert the plant from natural gas to coal
feedstock.
The co-production of nitrogen fertilizer, FT fuels and electricity from
coal-derived synthesis gas is anticipated to improve the thermal efficiency
and in turn the projected profitability of the overall process, and directly
relates to a patent issued to Rentech in October 2003. (US Patent No.
6,632,846 provides a method of using the excess hydrogen and carbon dioxide
streams produced from a typical Fischer-Tropsch process for the production of
ammonia and urea.) Rentech anticipates that this initial project could be the
catalyst for several additional conversion efforts within the domestic
nitrogen fertilizer industry which has suffered from high volatile natural gas
prices since 1999.
About Rentech, Inc.
Rentech, Inc., a Denver, Colorado corporation, incorporated in 1981, is
the developer and licensor of a patented and proprietary Fischer-Tropsch gas-
to-liquids process for conversion of synthesis gas made from natural gas,
industrial off-gas, or solid or liquid carbon-bearing materials, including
coal, into high-value fuels and chemicals. These include clean burning,
ultra-low-sulfur and ultra-low-aromatic fuels (beyond detectable limits),
naphtha, waxes and fuel for fuel cells.
Safe Harbor Statement
Certain information included in this report contains and other reports or
materials filed or to be filed by the Company with the Securities and Exchange
Commission (as well as information included in oral statements or other
written statements made or to be made by the Company or its management) or
will contain "forward-looking statements" within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended, Section 27A of the Securities
Act of 1933, as amended, and pursuant to the Private Securities Litigation
Reform Act of 1995. The forward-looking statements may relate to financial
results and plans for future business activities and are thus prospective.
The forward-looking statements are subject to risks, uncertainties and other
factors that could cause actual results to differ materially from future
results expressed or implied by the forward-looking statements. They can be
identified by the use of terminology such as "may," "will," "expect,"
"believe," "intend," "plan," "estimate," "anticipate," "should" and other
comparable terms or the negative of them. You are cautioned that, while
forward-looking statements reflect our good faith belief and best judgment
based upon current information, they are not guarantees of future performance
and are subject to known and unknown risks and uncertainties. Factors that
could affect Rentech's results include our ability to obtain financing for the
purchase and conversion of the plant and for working capital; acquisition of
an inexpensive long-term coal supply contract; natural gas prices during the
construction phase; final project costs due to volatility of prices of
equipment; obtaining customers and favorable prices for the products; the
timing of various phases of the project; the entry into definitive agreements
with others related to the project, and the risk factors detailed from time to
time in the Company's periodic reports and registration statements filed with
the Securities and Exchange Commission. Any forward-looking statements are
made pursuant to the Private Securities Litigation Reform Act of 1995, and
thus are currently only as of the date made.
For more information please contact: Mark Koenig, Director of Investor
Relations, Rentech, Inc. at 303-298-8008 or E-mail at mkir@rentk.com, or see
the Company's web site at: http://www.rentechinc.com
SOURCE Rentech, Inc.
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Related links:
http://www.rentechinc.com
CONTACT:
Mark Koenig, Director of Investor Relations
of Rentech, Inc.,+1-303-298-8008, mkir@rentk.com
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