Rentech to Acquire Majority Ownership of ClearFuels Technology Inc.
April 19 2011 - 8:00AM
Business Wire
Rentech, Inc. (NYSE AMEX: RTK) announced today that it has given
notice of exercise of its option to acquire additional equity in
ClearFuels Technology Inc. (ClearFuels). Upon closing of the
transaction, Rentech would own a substantial majority of the equity
of ClearFuels, with existing ClearFuels investors retaining a
minority interest. The transaction will be accomplished through the
merger of a subsidiary of Rentech into ClearFuels, with ClearFuels
continuing as the surviving company in the merger. The option was
exercised pursuant to the terms of an option agreement signed by
the two companies in September 2010. The merger is expected to
close within a month. The companies expect no interruption of the
project and technology development activities of ClearFuels.
At present, Rentech owns 25% of ClearFuels, a project
development company with proprietary reformation technology for the
gasification of biomass. Under a Project Support Agreement signed
in September 2010, Rentech assumed control of the two companies’
joint integrated bio-refinery project which is being funded in part
by a $23.0 million grant from the U.S. Department of Energy. The
grant is partially funding construction of a demonstration-scale
ClearFuels biomass gasifier at Rentech’s Energy Technology Center
(RETC). Upon completion late this year, the gasifier will be
integrated with Rentech’s Product Demonstration Unit (PDU) to
produce certified renewable synthetic jet and diesel fuels from
cellulosic biomass feedstocks.
With the successful demonstration of the ClearFuels gasifier at
Rentech’s PDU, Rentech will be able to offer the market an
integrated solution, based on the ClearFuels reformation
technology, for the conversion of cellulosic biomass feedstocks
such as bagasse and other virgin biomass into high-value energy
products such as certified low-carbon renewable synthetic jet and
diesel fuels. These drop-in fuels are expected to qualify for
renewable identification numbers (RINs) as cellulosic fuels and to
command premium value for their low carbon and renewable
attributes.
ClearFuels is developing potential biomass-to-energy projects in
the Southeastern U.S., Hawaii and internationally that would use
the integrated ClearFuels-Rentech design and be co-located at sugar
mills and wood processing facilities. The ClearFuels-Rentech design
can be deployed to help achieve compliance with the European
Union’s Emissions Trading Scheme as well as other low carbon fuels
standards and renewable mandates.
ClearFuels is in active negotiations with Hawaiian Electric
Company, Inc. (HECO) for a long-term conditional off-take contract
for renewable diesel for fueling of a power generator to be
produced at its proposed Hawaii project that would utilize the
ClearFuels biomass gasification process and Rentech’s synthetic
fuels technology to produce synthetic diesel fuel from bagasse. Any
agreement that results from these negotiations would be contingent
upon approval by the Hawaii Public Utilities Commission. ClearFuels
plans to continue its negotiations with HECO, and pursue the
development of the Hawaii project, with the full support of
Rentech.
Consideration for the shares of ClearFuels to be acquired by
Rentech consists of the obligations taken on by Rentech in the
Project Support Agreement to support the construction of the
ClearFuels technology at Rentech’s PDU. In connection with the
transactions contemplated by the option agreement and the Project
Support Agreement, Rentech will also issue a warrant to purchase
approximately two million shares of Rentech common stock and
provide the minority shareholders in ClearFuels with a carried
interest in the Hawaii project, if that project is successfully
developed.
Commenting on the acquisition, D. Hunt Ramsbottom, President and
Chief Executive Officer of Rentech, stated, “We’re excited to work
even more closely with the ClearFuels team to support their
development and technology. We now add the ClearFuels biomass
gasifier to our suite of energy conversion technologies, which
includes the Rentech-SilvaGas biomass gasifier and Rentech’s
process to produce drop-in fuels from synthetic gas. Rentech can
offer multiple integrated systems to convert a wide variety of
cellulosic materials into renewable low-carbon fuels certified for
commercial aviation and ground vehicles.” Mr. Ramsbottom continued,
“Our drop-in renewable diesel and jet fuels can help address the
world’s low-carbon energy needs.”
ClearFuels CEO, Eric Darmstaedter, commented, “We look forward
to continuing our project and technology efforts with the support
of Rentech. We are on schedule to produce, in less than 8 months,
renewable jet and diesel fuels from mixed biomass feedstocks using
the integrated ClearFuels-Rentech technologies. Demonstration of
this integrated technology will promote our development efforts in
Hawaii and on the mainland.” He added, “The DOE demonstration
project is also the gateway to integration of the ClearFuels
biomass reformation technology with a variety of other advanced
biofuels technologies that can bring added value.”
About Rentech, Inc.
Rentech, Inc. (www.rentechinc.com), incorporated in 1981,
provides clean energy solutions. The Company's Rentech-SilvaGas and
Rentech-ClearFuels biomass gasification processes 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 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 innovations and achievements,
particularly in aviation biofuels.
About ClearFuels Technology, Inc.
ClearFuels Technology Inc. (www.clearfuels.com) and its partners
are developing advanced sustainable biorefineries that convert
multiple mixed cellulosic biomass feedstocks into sustainable,
high-value energy products including renewable Fischer-Tropsch (FT)
diesel and jet fuel, ethanol, hydrogen and power at
industry-leading yields. The ClearFuels proprietary thermochemical
conversion process is based on its advanced High Efficiency
Hydrothermal Reformation (HEHTR) technology for biomass-to-syngas
conversion (BTG). This modular flexible BTG technology platform, in
combination with various synthetic gas-to-liquid (GTL) technologies
and co-location of its biorefineries at sugar mills, and at wood
processing and other biomass processing facilities, provides a
reduced risk, lower overall cost commercial strategy in line with
ClearFuels’ vision for production of clean clear 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 the ClearFuels biomass gasification
technology, the ability to integrate the gasification technology
with Rentech technologies and the timing of the completion of the
demonstration, the characteristics of the renewable fuels to be
produced from the technologies, and ClearFuels’ proposed
development projects using integrated technologies. 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 ability of the parties to create and successfully
market a combined technology offering, the financial means of
Rentech and ClearFuels to build their proposed projects,
fluctuations in commodities prices including the price of oil and
the materials necessary to construct a project, the impact of
changing government regulations on the project permitting process
and the qualification of renewable fuels 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.
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