Rentech Secures $20 Million Agreement, Amends Existing Term Loan
Wednesday, July 28, 2010
Rentech, Inc. 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, EVP and CFO of Rentech. 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.
Rentech, Inc., incorporated in 1981, provides clean energy solutions.
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