Rentech to Close Product Demonstration Unit

  Rentech to Close Product Demonstration Unit

Business Wire

LOS ANGELES -- February 28, 2013

Rentech, Inc. (NYSE MKT: RTK) announced today plans to cease operations at,
reduce staffing at, and mothball its research and development (R&D) Product
Demonstration Unit (PDU), in Commerce City, CO, and to eliminate all related
R&D activities. The Company's strategy is focused on more immediate growth
opportunities within the energy industry that do not rely on new technologies.

“We are grateful to our employees for their dedication and tremendous effort
to successfully develop innovative and workable technologies for alternative
energy production,” said D. Hunt Ramsbottom, President and CEO, of Rentech.
“While our elimination of these positions is a difficult decision, today’s
actions will further position Rentech to drive value for shareholders by
cutting R&D spending and focusing on businesses that generate strong returns,
with ready markets, and certainty of revenue. The investments we are
considering have either immediate or near-term profitability, and will meet
our disciplined investment criteria. Our success in growing Rentech Nitrogen
and generating attractive returns from that business is the best example to
date of the disciplined investment approach that we will follow as we consider
additional investments.”

Expected Cost Savings

As a result of these changes, Rentech will eliminate 65 employee and
contractor positions in the Company’s alternative energy segment during the
first half of 2013. In addition, Rentech will attempt to sell the PDU as well
as approximately 450 acres of land in Natchez, MS it acquired for the
development of an alternative energy facility. Rentech expects to incur a
one-time non-cash impairment charge to intangible assets related to its
technology of approximately $16 million, in its financial statements for the
period ended December 31, 2012.

Due to the PDU closing, Rentech expects expenses related to its research
activities and facilities and its technologies to decline from approximately
$21 million in 2012 to approximately $10 million in 2013, which is consistent
with the Company’s previous guidance. The 2013 expenses will be for final R&D
activities, including completion of the U.S. Department of Energy Integrated
Biorefinery (IBR) project grant requirements, winding down and
de-commissioning the PDU, employee severance, site maintenance, insurance,
preservation of patents and a small group of remaining employees.

Approximately $5 million of these 2013 expenses are anticipated to be
classified as selling, general and administrative (SG&A) expenses, beginning
in the second quarter as the Company cuts its R&D activities. The Company has
no plans to incur R&D expenses in 2014. SG&A expenses related to the Commerce
City site, technology maintenance and personnel are expected to be at an
annualized run rate of $2-3 million by the end of 2013. Any ongoing costs
would be to protect patents covering Rentech’s alternative energy
technologies, to maintain the Commerce City site if efforts to sell the site
are unsuccessful or to continue low-cost efforts to seek partners who would
provide funding to deploy its technologies.

Technology Accomplishments

Over the course of operating the PDU, Rentech has obtained sufficient data on
its alternative energy technologies, which can be used for commercial
application, and the Company has created a portfolio of intellectual property
rights to protect its technological advancements. The Company’s technologies
include the Rentech-ClearFuels and Rentech-SilvaGas biomass gasification
technologies, as well as the Rentech Fischer-Tropsch process, all of which
have been successfully demonstrated to produce synthetic and renewable fuels
and renewable power. The Company has operated its Fischer-Tropsch technology
successfully for more than 13,000 hours, and produced certified, synthetic jet
and diesel fuel. This month, Rentech concluded the IBR project at its PDU and
obtained the necessary data that would support the scale-up and the deployment
of the Rentech-ClearFuels and Rentech Fischer-Tropsch technologies. The
Company operated its Rentech-ClearFuels gasification technology at the PDU for
over 2,200 hours, and it operated the integrated biomass-to-fuels IBRproject
for more than 1,000 hours. The Rentech-SilvaGas biomass gasification
technology was previously demonstrated at commercial scale.

Focus on Profitable Growth Opportunities

The Company’s focus on nearer-term profitable growth opportunities is a direct
result of the high cost to develop new technologies relative to current energy
prices and lack of government incentives and regulations supporting
alternative energy, particularly within the United States, which have made it
difficult for the Company and other alternative energy companies to
commercialize their technologies. While Rentech believes that its technologies
have commercial value in the future as well as in different geographies, it
believes that Company resources are better directed at opportunities that will
produce more immediate returns, as it does not expect the market opportunity
for alternative energy to improve materially in the United States within the
next several years.

As previously disclosed, Rentech intends to focus on new businesses that meet
the following criteria: unlevered, after-tax returns in the mid-teens or
higher; certainty of revenue with long-term contracts for off-take, providing
stability of cash flows; reliance upon demonstrated technologies; and leverage
Rentech’s expertise. Rentech expects to make an announcement setting forth its
next steps within the coming months.

Today’s actions are the most recent in a series of steps Rentech has taken to
rationalize its capital structure, reduce operating expenses and deliver
value, including a special distribution of approximately $42 million to
shareholders in December 2012 of which approximately 75% was a return of
capital, the redemption of $57.5 million of convertible senior notes in 2012,
and the successful formation and expansion of Rentech Nitrogen.

About Rentech, Inc.

Rentech, Inc. (www.rentechinc.com) owns the general partner and approximately
60% of the common units representing limited partner interests in Rentech
Nitrogen Partners, L.P. (www.rentechnitrogen.com), a limited partnership
traded publicly under the symbol RNF. Rentech Nitrogen Partners, L.P.
manufactures and sells nitrogen fertilizer products. Rentech also owns the
intellectual property including patents, pilot and demonstration data, and
engineering designs for a number of clean energy technologies designed to
produce certified synthetic fuels and renewable power when integrated with
third-party technologies.

Safe Harbor Statement

This press release contains forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995 about matters such as the
Company’s confidence in the its financial future; whether and the extent to
which the Company will realize profitability on its alternative energy
business assets; anticipated spending levels; the ability of the Company to
grow its business; and the return profile of potential businesses the Company
may enter into. These statements are based on management’s 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
the Company’s prior press releases and periodic public filings with the
Securities and Exchange Commission, which are available via Rentech’s website
at www.rentechinc.com. The forward-looking statements in this press release
are made as of the date of this press release and Rentech 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.

Contact:

Rentech, Inc.
Julie Dawoodjee Cafarella
Vice President of Investor Relations and Communications
310-571-9800
ir@rentk.com
 
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