Los Angeles, Calif.-Rentech Inc. said Nov. 29 that Rentech Energy Midwest Corp. (REMC), its wholly-owned nitrogen fertilizer operation, has entered into a $52 million incremental loan agreement and amended its existing term loan (the second amendment). The total principal amount of outstanding term loans to REMC after the incremental loan agreement and second amendment was approximately $95.3 million. All of the net proceeds from the $52 million incremental loan will be available to Rentech for general corporate purposes, including development of the company’s technology and synthetic fuels and power projects. The incremental term loan will mature in 2014 on the same schedule as the existing term loan, and is expected to be repaid from cash flows generated by REMC. The second amendment provides for an early payment of $20 million of principal, made from cash at REMC that had been held for that purpose. The $20 million will reduce the payment of principal from excess cash flow required by the loan agreement after the end of fiscal year 2010, with any excess amount paid beyond the required prepayment to be credited against the prepayment requirement for fiscal year 2011. The amendment also modified certain financial covenants and terms governing the distribution of cash from REMC. Rentech projects that its budgeted activities for fiscal year 2011 are fully financed. “The market for nitrogen fertilizer has strengthened dramatically during the last several months, with higher product prices and continuing low prices for natural gas, leading to much higher expected profits,” said Dan Cohrs, Rentech executive vice president and CFO. “Our access to the credit markets has provided us with non-dilutive capital that will be used to complete our budgeted activities for this fiscal year, including the completion of FEED for our Rialto Project.”
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