Rentech Nitrogen Partners, L.P. has announced 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 US$5 million and a cash working capital adjustment, which is expected to be approximately US$6 million, after confirmation of the amount within 90 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 US$8 million earned over the next two years.
Rentech Nitrogen expects to set a record date for the distribution to its unitholders of the US$5 million initial cash payment, net of transaction related fees, which are currently estimated to be approximately US$600 000, 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 fertiliser facility. The process was extensive, involving almost 30 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 maximising 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.”
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.
Adapted from press release by Francesca Brindle
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/15032016/rentech-nitrogen-sells-pasadena-facility-2769/