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Rentech, Inc. (NASDAQ: RTK) today announced that GSO Capital Partners LP (GSO), the credit investment arm of Blackstone, will invest $150 million in Rentech in the form of $100 million of convertible preferred stock and a $50 million term loan. The transactions closed on April 9, 2014. In connection with this investment, Blackstone/GSO appointed two members to Rentech’s Board of Directors: Douglas Ostrover, a senior managing director of Blackstone and co-founder of GSO Capital Partners, and Patrick Moore, the former chairman and chief executive officer of Smurfit-Stone Container Corporation, a paper-based packaging company with significant wood fibre operations. Rentech also announced a settlement with Concerned Rentech Shareholders (CRS), whereby CRS will approve an additional member to join Rentech’s Board of Directors and the board’s newly formed Finance Committee. A slide presentation regarding today's announcements appears on Rentech’s website,
Proceeds from Blackstone/GSO’s investment will fund identified growth opportunities in Rentech’s wood fibre processing business. These opportunities are part of Rentech’s long-standing strategic plan for the wood fibre processing business. This plan was discussed most recently during the Company’s fourth quarter earnings conference call on March 11, 2014. Successfully executing these growth opportunities is designed to give Rentech’s wood fibre processing business the scale necessary for a possible initial public offering as a master limited partnership. Rentech used proceeds from the convertible preferred stock to repay the $50 million balance on its revolving margin loan. That facility has now been terminated, and the units of Rentech Nitrogen Partners, L.P. (Rentech Nitrogen) that served as collateral have been released.
“This investment by Blackstone’s GSO underscores the strength of our wood fibre business strategy. The investment is a vote of confidence in both our fibre and fertilizer businesses by a leading global investor,” said D. Hunt Ramsbottom, president and chief executive officer of Rentech. “In addition to funding our immediate growth plans, Blackstone/GSO’s investment gives Rentech a long-term partner with a proven track record in successfully evaluating and investing in new opportunities. Blackstone/GSO can also provide additional capital and access to investment opportunities as we continue to explore opportunities in our fibre and nitrogen businesses. We look forward to working with the Blackstone/GSO team.”