LOS ANGELES--(BUSINESS WIRE)-- Rentech, Inc. (NYSE MKT: RTK) today announced that its majority-owned subsidiary, Rentech Nitrogen Partners, L.P. (NYSE: RNF), has entered into a definitive agreement with Agrifos Holdings Inc. to purchase all of the membership interests of Agrifos LLC, for an initial purchase price of $158 million. Agrifos owns and operates a plant in Pasadena, Texas, that produces primarily ammonium sulfate fertilizer. The acquisition is expected to be accretive to cash distributions per unit paid by Rentech Nitrogen to its unitholders beginning in 2013. Rentech currently owns 23.25 million units of Rentech Nitrogen, a publicly-traded partnership that owns a nitrogen fertilizer manufacturing plant located in East Dubuque, IL.
In conjunction with the closing of this transaction, Rentech Nitrogen has secured commitments from its existing and new lenders to amend its existing debt facility, and expand its borrowing base from $135 million to $300 million. The debt facility will continue to be guaranteed by Rentech Nitrogen. The transaction, which is subject to customary closing conditions, is anticipated to close within one week of the date of this announcement.
Commenting on the transaction, D. Hunt Ramsbottom, CEO of Rentech and Rentech Nitrogen GP, LLC, stated, “We’re very pleased to have executed on this transaction. Growing Rentech Nitrogen is one of the pillars of our strategy to enhance returns for Rentech shareholders.” Mr. Ramsbottom continued, “Agrifos’ business is expected to provide incremental cash flow and diversifies the products, markets, location, and raw materials of our existing natural gas-based nitrogen fertilizer plant in East Dubuque, Illinois. Not only do we expect this business to be accretive to cash available for distribution beginning in 2013, but the facility comes with several growth opportunities, the first of which we have included in our financing package for this transaction. This growth at the Pasadena plant would add to the growth in cash flow that we expect from the expansion projects currently underway at Rentech Nitrogen’s existing fertilizer plant.”
For more information on the acquisition, please refer to Rentech Nitrogen’s press release issued today, which is available at www.rentechnitrogen.com.
About Rentech, Inc.
Rentech, Inc. (www.rentechinc.com) owns and develops technologies that enable the production of certified synthetic fuels and renewable power when integrated with certain other third-party technologies. The Company’s clean energy technology portfolio includes the Rentech-SilvaGas biomass gasification technology and the Rentech-ClearFuels biomass gasification technology, both of which can produce synthesis gas from biomass and waste materials for production of renewable power and fuels. The Rentech-ClearFuels Gasifier can also produce renewable hydrogen as a product. Rentech also owns the patented Rentech Process which is based on Fischer-Tropsch chemistry. The Rentech Process can convert syngas from the Company’s own or other gasification technologies into complex hydrocarbons that then can be upgraded into fuels or chemicals using refining technology that we license.
Rentech also owns, through its wholly owned subsidiaries, the general partner interest and approximately 61% of the common units representing limited partner interests in Rentech Nitrogen Partners, L.P. (www.rentechnitrogen.com), a publicly traded limited partnership under the trading symbol “RNF.” Rentech Nitrogen Partners, L.P. manufactures and sells nitrogen fertilizer products including ammonia, urea ammonia nitrate and liquid and granular urea in the Mid Corn Belt region of the 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 Rentech Nitrogen’s business and outlook, including the acquisition of Agrifos and its impact on cash distributions. 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 are set forth in the Company’s prior press releases and periodic public filings with the Securities and Exchange Commission, which are available via Rentech’s website at www.rentechinc.com. The forward-looking statements in this press release are made as of the date of this press 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.