Rentech closes the sale of alternative energy technology assets
Rentech, the owner and operator of wood pellet production and wood fibre processing businesses, has closed the previously announced sale of its alternative energy technologies to Sunshine Kaidi New Energy Group.
Rentech received a cash payment of $14.4 million (€11.6 million) from Kaidi, which is in addition to $500,000 in cash payments previously received. Kaidi will pay an additional $400,000 to Rentech to purchase various equipment currently located at Rentech’s decommissioned Product Demonstration Unit (PDU), resulting in $15.3 million of total proceeds to Rentech from these transactions. This additional transaction is expected to close before the end of the year.
D. Hunt Ramsbottom, Rentech’s president and CEO, says: ‘We are pleased to have closed this sale as part of our cost reduction efforts and focus on our wood fibre processing and nitrogen fertiliser businesses.’
The transaction calls for the possibility of success payments to Rentech of up to $16.2 million. These payments would be triggered if Kaidi successfully builds and operates, at its cost, a demonstration-scale plant in China that uses the technologies acquired from Rentech and performs at specified levels.
Rentech and Kaidi will share equally in any proceeds from the future sale of the PDU site in Commerce City, Colorado, net of transaction fees and carrying costs of the property incurred by Rentech after 30 September 2014. Rentech expects to close on the sale of the site in the first half of 2015.