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|Rentech Energy Midwest Corporation Enters into $20 Million Incremental Loan Agreement and Amends Existing Term Loan|
LOS ANGELES, Jul 26, 2010 (BUSINESS WIRE) -- Rentech, Inc. (NYSE AMEX: RTK) today announced that Rentech Energy Midwest Corporation (REMC), its wholly-owned nitrogen fertilizer operation, has entered into a $20 million incremental loan agreement and amended its existing $62.5 million term loan (First Amendment). Credit Suisse was the sole lead arranger of the incremental loan.
All of the net proceeds from the $20 million incremental loan will be available to Rentech for general corporate purposes, including development of the Company's technology and synthetic fuels and power projects. The incremental term loan will mature in 2014 on the same schedule as the existing term loan and is expected to be repaid from cash flows generated by REMC.
The First Amendment provided for an early payment of $15 million of principal, made from cash at REMC that had been held for that purpose. The $15 million will reduce the payment of principal from excess cash flow required by the loan agreement at the end of fiscal year 2010. The amendment also modified certain financial covenants.
"The cash provided to Rentech by the incremental loan exceeds the expenses expected for the FEED phase of development for our Rialto Project," said Dan Cohrs, Executive Vice President and Chief Financial Officer of Rentech. Mr. Cohrs continued, "Access to the credit market has given us significant new funding for our alternative energy business."
The Company stated that its budgeted activities for fiscal year 2010 are expected to be funded from cash on hand. Budgeted activities for the fiscal year include continued development and front-end engineering and design (FEED) for the Company's Rialto Project, continued development of the Natchez Project, operation of the Product Demonstration Unit, continued research and development of the Rentech technologies and funding of general working capital needs.
About Rentech, Inc.
Rentech, Inc. (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.rentechinc.com&esheet=6372795&lan=en-US&anchor=www.rentechinc.com&index=1&md5=8ad088c0b38d2f2808d5f6b38e8fd545), incorporated in 1981, provides clean energy solutions. The Company's Rentech-SilvaGas biomass gasification process can convert multiple biomass feedstocks into synthesis gas (syngas) for production of renewable fuels and power. Combining the gasification process 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 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 pursues licenses of 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. Rentech has been recognized by Biofuels Digest as one of the 50 Hottest Companies in Bio-energy and has been named as one of the Biofuels Digest Companies of the Year for its recent innovations and achievements, particularly in aviation biofuels.
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 projected funding for the Company's fiscal year 2010 budgeted activities, the value of Rentech Energy Midwest Corporation, the anticipated use of proceeds from the debt financing and the projected flexibility and liquidity of the Company. 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 financial means of Rentech to build 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 http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.rentechinc.com&esheet=6372795&lan=en-US&anchor=www.rentechinc.com&index=2&md5=420bfce1780c150d0be29d82934dc7f5. 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.
SOURCE: Rentech, Inc.
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