Rentech, Inc. (NASDAQ:RTK) Gains On New Investments From BlackStone and Settling Issues With CRS


Dallas, Texas 04/22/2014 (FINANCIALSTRENDS) –  Rentech, Inc. (NASDAQ:RTK) share price has gone up by 21.43 percent during trading in the past 30 days. The reason for the huge build up in the investor confidence in the stock is due to big ticket institutional investor Blackstone pouring in $150 million into the stock and the Los Angeles based firm announcing that it has managed to arrive at a mutually agreeable settlement terms with its activist institutional investor CRS.

First the details about the settlement agreement CRS.

As per the terms of agreement, Rentech, Inc. (NASDAQ:RTK) will bring on board an additional director who has the blessings of CRS. This would be accomplished by the firm seeking’s its share holders approval for expanding its board of directors. In addition the agreement draws out the details of setting up a finance committee which will be a 5 member body in which “Messrs. Ostrover and Moore and the additional director candidate approved by CRS” will be permanent appointees. This newly set up finance committee will have oversight on big ticket capital expenditure proposals, in addition to over all task of initiating measures which will bring down the cost expenditure of the company. In return CRS has agreed to ask multiple nominees it had primed for contesting the elections to the board of directors to stand down, and will support the nominees put up by Rentech, Inc. (NASDAQ:RTK)

The details of new investments from Blackstone’s investment arm are as follows:

The investment of $150 million will be routed through the private investment firm’s investment arm GSO Capital Partners. The proceeds would be used to expand the firm’s business expansion plans in the wood fibre processing sector. In exchange, the institutional investor gets to nominate three new board members to Rentech, Inc. (NASDAQ:RTK), who will be providing their expertise in capital structures and the overall wood fibre industry.