Rentech Spikes After Liquidity Improvements Revealed

Shares of Rentech, Inc. RTK were trading higher by nearly 2 percent Monday afternoon as investors and traders found the company's liquidity announcement encouraging. Rentech announced on Friday the closing of its previously announced Rentech Nitrogen Partners merger, which has enabled it to retire approximately $142 million of senior obligations to GSO Capital Partners. Rentech noted the transaction improves its liquidity positioning, reduces future interest expenses and better positions itself to maximize the value of its investments within the wood fibre processing industry. Rentech added that it has retained $109.8 million of the total pre-tax proceeds from the transaction and estimates it will pay $5 to $15 million in taxes. Keith Forman, Rentech's President and CEO, stated, "The transactions announced today represent a milestone for Rentech. We say goodbye to a business that has served our shareholders well and to a team of dedicated professionals at our East Dubuque facility who have been conscientious guardians and operators of this asset. We thank them." "This transaction affords Rentech the opportunity to reposition and intensify the focus on our investments in the wood fibre processing industry. It does so by providing us the liquidity and strengthened balance sheet to complete the construction and ramp-up of our Canadian facilities. This outcome would not have been possible save for the active willingness of GSO Capital to work with us on the terms of the exchange; both at the inception, in allowing for repayment of senior obligations in exchange for equity, and today in further modifying the terms of our agreements to allow for an outcome of less debt, greater liquidity, and less dilution than originally called for. As a result, we retain a meaningful stake in the "new" CVR Partners. We wish CVR well and we are confident that they will be good stewards of this asset as we have tried to be," added Mr. Forman.