LOS ANGELES--(BUSINESS WIRE)--
Rentech Nitrogen Partners, L.P. (NYSE: RNF) announced today that it has
entered into a $50 million revolving credit facility with GE Capital,
Corporate Finance. The partnership plans to use the credit facility to
fund growth projects. The facility will also be available, if needed,
for general partnership purposes.
Nitric acid plant upgrade: This previously announced project
would increase nitric acid production and significantly reduce power
consumption at the East Dubuque facility. The partnership is targeting
an increase of 8%, or 30 tons per day, in nitric acid production. This
would allow the facility to upgrade more ammonia to produce an
additional 14,700 tons of UAN annually. The partnership expects this
project to cost approximately $7 million, with an estimated return of
greater than 30%. The partnership expects completion of the project in
the first quarter of 2015.
Fourth Urea CO2 compressor: The East
Dubuque facility is installing a fourth CO2 compressor in
the urea plant to improve reliability and yield a 5% increase in urea
production rates. This is expected to bring total urea production to
approximately 484 tons per day. The partnership plans to upgrade the
additional urea tons to UAN and diesel exhaust fluid (DEF). The total
project cost is expected to be approximately $4 million, with an
estimated return greater than 20%. Project completion is scheduled for
the end of this year.
Third DEF storage tank: The East Dubuque facility is installing
a third DEF tank to provide flexibility to store additional urea in
response to growing demand for liquid urea and DEF. The project is
expected to cost approximately $0.4 million, with an estimated return
of approximately 20%. The partnership expects to commission the tank
in the fourth quarter of this year.
Hydrogen recovery upgrade: This project at the East Dubuque
facility will increase the amount of hydrogen recovered from the purge
gas, improving the efficiency of the ammonia plant synthesis loop. The
total estimated cost of the project is $0.4 million, with a projected
return of greater than 150%. The project is expected to be completed
at the end of this month.
This credit facility replaces the $35 million†working capital facility
established in April 2013, providing more flexibility at lower cost to
the partnership. The new facility has less restrictive financial
covenants than the previous facility, with no financial covenants unless
the outstanding balance exceeds $35 million or there is otherwise a
default or an event of default continuing under the facility. The new
facility does not have a requirement to repay periodically the entire
outstanding balance, allowing the partnership to use borrowings under
the facility to fund capital projects.
The credit facility is secured by substantially all of the assets of the
partnership and is guaranteed by its operating subsidiaries. The
interest rate on outstanding balances is LIBOR plus 325 basis points,
with no LIBOR floor, to be paid quarterly. An unused facility fee of 50
basis points will be paid quarterly. The new facility requires no
amortization of principal, and may be drawn upon until it matures on
July 22, 2019.
The credit facility is currently undrawn. During calendar year 2014, the
partnership expects to have an outstanding balance of $10 to $15 million
to fund the following growth projects:
In its ongoing efforts to increase cash distributions, the partnership
will continue to evaluate potential projects at its facilities.
Additional borrowings under the credit facility could fund these
projects should they meet the partnershipís investment return hurdles
and receive approval of the board. The partnership expects to distribute
less than all of the cash available for distribution in the second
quarter of 2014, in order to replenish working capital reserves that
were diminished by†$20 million†of negative cash available for
distribution in the fourth quarter of 2013. Rentech Nitrogen does not
expect to use borrowings under the new credit facility to replenish
those working capital reserves.
About Rentech Nitrogen, L.P.
Rentech Nitrogen (www.rentechnitrogen.com)
was formed by Rentech, Inc. to own, operate and expand its nitrogen
fertilizer business. Rentech Nitrogenís assets consist of two fertilizer
production facilities owned by its operating subsidiaries. The East
Dubuque facility is located in the northwestern corner of Illinois, and
uses natural gas as a feedstock to produce primarily anhydrous ammonia
and UAN solution for sale to customers in the Mid Corn Belt. The
Pasadena facility is located in Pasadena, Texas, along the Houston Ship
Channel, and uses ammonia and sulfur as feedstocks to produce ammonium
sulfate and ammonium thiosulfate fertilizers, and sulfuric acid. Rentech
Nitrogen is the largest producer of synthetic granulated ammonium
sulfate fertilizer in North America, with sales in the United States and
This press release contains forward-looking statements about matters
such as: our forecasts for spending and expected returns on growth
projects in 2014; funding sources for replenishment of the working
capital reserve; and our ability to complete the growth projects on
schedule and on budget. These statements are based on managementís
current expectations and actual results may differ materially as a
result of various risks and uncertainties. Other factors that could
cause actual results to differ from those reflected in the
forward-looking statements are set forth in Rentech Nitrogenís prior
press releases and periodic public filings with the Securities and
Exchange Commission, which are available via Rentech Nitrogenís website
The forward-looking statements in this press release are made as of the
date of this press release and Rentech Nitrogen does not undertake to
revise or update these forward-looking statements, except to the extent
that it is required to do so under applicable law.
Rentech Nitrogen Partners, L.P.
Julie Dawoodjee Cafarella
president of Investor Relations and Communications
Source: Rentech Nitrogen Partners, L.P.