LOS ANGELES–(BUSINESS WIRE)–Rentech Nitrogen Partners, L.P. (NYSE: RNF) announced today that it has completed the sale of its Pasadena, Texas facility to Pasadena Commodities International, an affiliate of Interoceanic Corporation (IOC), who is the plant’s long-time distributor for ammonium sulfate.
The transaction calls for an initial cash payment to Rentech Nitrogen of $5 million and a cash working capital adjustment, which is expected to be approximately $6 million, after confirmation of the amount within ninety days of the closing of the transaction. The purchase agreement also includes an earn-out that would be paid to Rentech Nitrogen unitholders equal to 50% of the facility’s EBITDA in excess of $8 million earned over the next two years.
Rentech Nitrogen expects to set a record date for the distribution to its unitholders of the $5 million initial cash payment, net of transaction-related fees which are currently estimated to be approximately $0.6 million, prior to closing the pending merger between Rentech Nitrogen and CVR Partners, LP. The cash working capital adjustment and any additional cash payments made by the acquirer relating to the purchase of the Pasadena facility will be made to Rentech Nitrogen’s unitholders as of the same record date within a reasonable time shortly after receiving such cash payments.
Keith Forman, CEO of Rentech Nitrogen, stated, “We are pleased to be able to announce the successful conclusion of the lengthy process to divest Rentech Nitrogen’s ownership in the Pasadena fertilizer facility. The process was extensive, involving almost thirty parties, representing both industry and financial buyers. The facility is being sold to an affiliate of IOC with whom we have had a relationship since our original acquisition of this facility over three years ago. They are familiar to us and we believe they will be good stewards of this asset going forward from every perspective, not the least of which will be maximizing the value of our profits interest. This sale also enables us to proceed toward closing Rentech Nitrogen’s merger with CVR Partners, a transaction we believe will be beneficial to both sets of unitholders.
“Further, I would like to commend and thank the employees and management for their efforts during the successful restructuring of plant operations and their efforts during the past months to successfully conclude this transaction,” added Mr. Forman.
In conjunction with the sale of the Pasadena facility, Rentech Nitrogen plans to submit a request with the Securities and Exchange Commission to withdraw its registration statement on Form S-1 relating to the proposed spin-out of the facility.
Rentech Nitrogen expects to close the merger with CVR Partners on or about the end of this month.
About Rentech Nitrogen Partners, L.P.
Rentech Nitrogen (www.rentechnitrogen.com) was formed by Rentech, Inc. to own, operate and expand its nitrogen fertilizer business. Rentech Nitrogen’s East Dubuque facility is located in the northwestern corner of Illinois, and uses natural gas as a feedstock to produce primarily anhydrous ammonia and UAN solution for sale to customers in the Mid Corn Belt
This press release contains forward-looking statements about matters such as Pasadena Commodities’ success in operating the Pasadena facility and our ability to consummate the proposed transaction with CVR Partners. These statements are based on management’s current expectations. 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 are set forth in Rentech Nitrogen’s prior press releases and periodic public filings with the Securities and Exchange Commission, which are available on Rentech Nitrogen’s website at www.rentechnitrogen.com. The forward-looking statements in this press release are made as of the date of this press release. Rentech Nitrogen 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.