RTK Rentech, Inc.

Rentech, Inc. (NYSE AMEX: RTK) announced today that the U.S. Department of Energy (DOE) Loan Guarantee Program Office (LGPO) has selected Rentech’s loan guarantee application for its proposed Rialto Renewable Energy Center (Rialto Project) for due diligence review. Rentech applied in February of 2010 for a loan guarantee for the Rialto Project as an advanced bio-refinery under the Section 1705 Title XVII Loan Guarantee Program.

With the selection for due diligence, the LGPO is initiating discussions with Rentech regarding detailed due diligence, the negotiation of terms and conditions of a potential loan guarantee, NEPA compliance and all other issues necessary for the LGPO to consider the issuance of a conditional commitment and, potentially, a loan guarantee for the Rialto Project.

Commenting on the DOE notification, D. Hunt Ramsbottom, President and CEO of Rentech, stated, “We are encouraged by the Rialto Project’s progress to the next phase of the loan guarantee review process and we look forward to detailed due diligence and the possibility of term sheet negotiations with the DOE Loan Guarantee Program Office. While we have achieved a significant milestone in the process, we recognize that this is one of many steps necessary before a loan guarantee would be issued and funded.” Mr. Ramsbottom continued, “We continue to aggressively work on finalizing the commercial contracts related to the project which could lead to the negotiation of a loan guarantee.”

The loan guarantee, if granted, would support the construction of Rentech’s commercial-scale California-based Rialto Project, which is being designed to produce approximately 9 million gallons per year of renewable fuels and 35 megawatts of renewable power from green waste.

The invitation to due diligence is not an assurance that the project will be offered a term sheet or a conditional commitment. In the notification letter, the LGPO specified its expectation of a more conservative capital structure with substantially higher project equity requirements than those implied by the maximum leverage and loan tenor described in the Loan Guarantee Solicitation Announcement under which the application was submitted. The Company believes that any terms offered by the LGPO will depend on the project’s overall commercial risk profile, which may change as development continues and commercial contracts are negotiated.

Rentech is also evaluating alternative sources of financing for the project that may be available in the event that any loan guarantee terms offered by the DOE are not attractive or that satisfactory commercial agreements are not completed in time to meet the deadlines in the American Recovery and Reinvestment Act that governs the Section 1705 loan guarantee program. Under the Section 1705 program as currently authorized, applicants are required to commence construction of their projects and achieve financial closing by September 30, 2011.

About the Rialto Renewable Energy Center (Rialto Project)

Rentech is developing the Rialto Renewable Energy Center in Rialto, California. The Rialto Project is expected to be a first-of-its-kind renewable energy project designed to produce approximately 9 million gallons per year of renewable drop-in synthetic fuels, primarily RenDiesel® fuel, and approximately 35 MW of renewable RenPowerTM electric power from urban green waste diverted from landfills. Both of these products would have lower carbon footprints than fuels and power produced from fossil fuels and help California reduce greenhouse gas emissions, consistent with the State's Low Carbon Fuel Standard and Renewable Portfolio Standard. The project is anticipated to create over 1,000 direct and indirect jobs during the construction and operations phases.

The Rialto Project is expected to be the first commercial-scale application of a Fischer-Tropsch reactor in the U.S. The biofuels and advanced gasification technologies utilized by the project would support the growth and expansion of non-petroleum based solutions to the nation’s energy needs.

About Rentech, Inc.

Rentech, Inc. (www.rentechinc.com), 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 proven 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 is provided under an alliance with UOP, a Honeywell company. Rentech develops projects and licenses 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 the characteristics of the renewable fuels and power to be produced from Rentech’s technologies, the Company's development of a proposed synthetic fuels facility in Rialto, California, timing and finalizing of satisfactory commercial agreements related to the project, the prospects and implications of a loan guarantee from the Department of Energy and alternative sources of financing for the project. 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 and the qualification of renewable power and fuels, the DOE’s rejection of the Company’s loan guarantee application 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 www.rentechinc.com. 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.

Rentech, Inc. (NASDAQ:RTK)
Historical Stock Chart
From Jun 2024 to Jul 2024

Rentech, Inc. (NASDAQ:RTK)
Historical Stock Chart
From Jul 2023 to Jul 2024