Concerned Rentech Shareholders, a group led by Engaged Capital LLC and Lone Star Value Management LLC, together one of the largest stockholders of Rentech Inc., said March 20, that they intend to solicit fellow shareholders of RTK for the written requests to call a special meeting of shareholders to amend the company’s charter. The amendment seeks to require the company to obtain the approval of shareholders prior to issuing dilutive equity or equity-linked securities greater than 5 percent of the outstanding shares of the company, except in limited circumstances such as a public offering.
"It appears the board and management of RTK are planning a dilutive capital raise against, we believe, strong shareholder opposition. It is clear to us that management and the board are acting contrary to the shareholders’ interests and further disenfranchising shareholders and entrenching themselves. A special meeting of shareholders to consider the amendment proposal, is urgently required to reign in the company’s poor capital allocation that, in our view, has become a hallmark of this board and management team. Shareholders have the right to an opportunity to stop future issuances of equity or equity-linked capital before the board acts unilaterally and without the support of the company’s owners. The special meeting will give shareholders the voice they need to make sure this board and management team cannot act recklessly with our capital." stated Glenn Welling, chief investment officer of Engaged Capital.
CRS said the written support of shareholders who own at least 10 percent of the issued and outstanding shares of the company is required in order to call a special meeting of shareholders to consider the amendment proposal. Once this special meeting is called, CRS plans to send proxy materials to shareholders soliciting votes in favor of the amendment proposal as described in the solicitation statement. CRS has made a preliminary filing with the United States Securities and Exchange Commission of a solicitation statement to call a special meeting of shareholders to amend the charter of the company.