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. (RTK) with aggregate ownership of approximately 4.6 percent of the outstanding shares of RTK, today announced it has submitted formal nominations of four independent, highly-qualified candidates for election to the board of directors of RTK at the upcoming 2014 annual meeting of RTK’s stockholders.
RTK owns the majority stake in Rentech Nitrogen Partners LP which owns fertilizer plants in East Dubuque, Ill., and Pasadena, Texas.
In a letter accompanying the nomination notice, Concerned Rentech Shareholders highlighted its frustration at the continued destruction of shareholder value at RTK and the persistent missteps and lapses in oversight that have caused the group to lose confidence in the current board’s ability to effectively oversee RTK. Concerned Rentech Shareholders concluded that immediate board reconstitution, including through direct shareholder representation, is needed to ensure that all decisions place the best interests of RTK’s shareholders first and foremost.
On Dec. 27 Concerned Rentech Shareholders revealed that it submitted to the board a formal request for exemption under the company’s Tax Benefit Preservation Plan to allow the group to acquire beneficial ownership in the aggregate of up to 7 percent of the outstanding shares of RTK’s stock. To date, the board has not responded to this request. The Rights Plan prohibits any RTK shareholder or group of shareholders from acquiring in excess of 5 percent of the company’s outstanding stock except in certain limited circumstances.
Glenn Welling of Engaged Capital and Jeff Eberwein of Lone Star Value commented: “Our decision to nominate four candidates for election at the 2014 Annual Meeting follows over a year of failed discussions with the Company in which our constructive suggestions were ignored and value destruction persisted. We believe it is imperative to inject an independent, fresh perspective in the boardroom in order to foster management accountability, instill capital discipline, and protect the interests’ of RTK’s shareholders.”
The four nominees include one with considerable fertilizer industry experience: Larry Holley, age 65, was senior vice president and chief operating officer of Mississippi Chemical Corp. where he was employed from November 1974 until January 2005. Other nominees include Jeffrey Brown, age 52, CEO and founding member of Brown Equity Partners LLC, which provides capital to management teams and companies needing equity; Jeffre Eberwein , 43, founder and CEO of Lone Star Value Management, an investment firm; and Glenn Welling, age 43, is the founder and chief investment officer of Engaged Capital, a California based activist investment firm and registered advisor with the SEC focused on investing in small and mid-cap North American equities.
RTK issued the following statement in response to the statement by the Concerned Rentech Shareholders:
"Rentech is always open to constructive input from our shareholders as part of the company’s constant focus on maximizing shareholder value. In keeping with our commitment to maintain a highly qualified and experienced board, Rentech’s Nominating and Corporate Governance Committee will carefully evaluate Engaged’s and Lone Star Value’s nominees and recommend in due course to the full board nominees that it believes will best serve the interests of the company and all of its shareholders.
"Our board of directors and management team continue to believe that execution of our strategy over the coming months will create significant value for shareholders. We have identified opportunities for substantial growth with attractive retur