Rentech Enters into a Series of Transformative Transactions

LOS ANGELES--(BUSINESS WIRE)--

Rentech, Inc. RTK announced today that it has agreed to vote its 59.7% ownership interest in Rentech Nitrogen Partners, L.P. RNF in favor of the proposed merger with CVR Partners LP. Upon the closing of the merger, Rentech would receive approximately $318 million in cash and units of CVR Partners, plus a retained interest in Rentech Nitrogen's Pasadena facility, based on the closing unit price of CVR Partners on August 7, 2015. Rentech and other holders of Rentech Nitrogen would receive the value of the Pasadena facility upon the disposition of the asset.

Rentech Nitrogen and CVR Partners will host a conference call today at 7:00 a.m. PDT regarding the announcement. Additional details will be provided in an investor presentation posted on Rentech's website prior to the call.

Under the terms of the merger agreement, Rentech will receive $2.57 in cash, 1.04 units of CVR Partners, and the value per unit of the Pasadena facility, in exchange for each of its 23.25 million units in Rentech Nitrogen. Rentech estimates its after-tax cash proceeds to be approximately $16 million, based on preliminary estimates of the gains to be triggered by these transactions and excluding any sale proceeds from Pasadena.

Simultaneously with the closing of the merger, $100 million of outstanding convertible preferred stock held by GSO Capital Partners (GSO Capital) will be exchanged for $90 million of newly-received units of CVR Partners and $10 million of newly-issued common shares of Rentech, Inc. $50 million of debt owed to GSO Capital will also be exchanged for units of CVR Partners received in the merger. The number of units and shares exchanged will be based on a 15 percent discount to the 60-day volume weighted average price (vwap) ending two days before the closing of the merger. Rentech will have a one-time option to repurchase any or all such units of CVR Partners at a price of 1.275 times the pre-closing vwap, during the period from six to twelve months following the closing of the merger. The remaining balance of debt owed to GSO Capital will be $45 million at an interest rate of LIBOR plus 700 basis points per annum, with a LIBOR floor of 1.00%. The terms of the term loan will be amended as outlined in the presentation and in related filings.

"The transaction is an important step in executing our strategy to strengthen our balance sheet and establish Rentech as a pure-play fibre business. The closing of the transaction recently announced by Rentech Nitrogen, combined with the repayment of substantially all of the investments by GSO, would significantly de-lever Rentech and increase our liquidity. We would continue to hold significant value of liquid securities in a more-diversified nitrogen company," stated Keith Forman, president and CEO of Rentech.

Rentech will initially own about 21.3% of the new CVR Partners. After giving effect to the transactions with GSO Capital, Rentech's ownership in CVR Partners will decline substantially, in an amount that can be determined only after the pre-closing prices are known. Based on the vwap leading up to August 7, Rentech would own approximately 10% of the new CVR Partners and GSO Capital would own approximately 11%. The exchange of Rentech Nitrogen units for CVR Partners units will not generate immediate taxable gains to Rentech. However, the cash consideration received and the subsequent exchange of CVR Partners units to retire preferred stock and debt will create taxable gains to Rentech. Rentech expects to fully-utilize its federal net operating loss carryforwards, which were $176.7 million as of December 31, 2014, to partially offset gains on these transactions.

Rentech Nitrogen unitholders will have the right to receive pro-rata distribution of the net proceeds of a future potential disposition of the Pasadena facility. If the sale of the Pasadena facility were competed prior to the closing of the merger, the net proceeds from the sale would be paid to unitholders at or before the closing of the merger in a special distribution. If the sale of the Pasadena facility to a third party were not completed by the closing of the merger, the Pasadena facility would be transferred to a separate entity that would enable the unitholders of Rentech Nitrogen to retain the rights to their pro-rata shares of cash flows and net proceeds from the sale of the facility. There can be no assurances that the Pasadena facility can be sold prior to the closing date of the merger or at all.

The combined entity of CVR Partners will operate two nitrogen fertilizer facilities that will produce approximately 1.9 million sellable tons of nitrogen products annually. CVR Partners expects this transaction to be accretive to its cash distributions per unit beginning in 2016. The partnership also expects to realize meaningful EBITDA synergies.

CVR Partners will appoint to its board two individuals designated by Rentech upon closing of the transaction. The units that Rentech and GSO Capital will receive in connection with the merger will be subject to restrictions on sale for six months after the closing date of the transaction.

The transaction is subject to approval by a majority of the outstanding Rentech Nitrogen units. Rentech has agreed, subject to certain terms and conditions, to vote its 59.7% stake in Rentech Nitrogen in favor of the transaction. The completion of the merger is also subject to the disposition of the Pasadena facility, either by sale to a third party, or through retention by unitholders of Rentech Nitrogen of a separate entity that owns the Pasadena facility. Completion of the merger, assuming the requisite unitholder vote is obtained, and subject to the terms and conditions outlined in the merger agreement, is expected to occur by the end of 2015, and no later than May 31, 2016.

Evercore is serving as financial advisor to Rentech and Latham & Watkins is serving as Rentech's legal advisor.

Conference Call

CVR Partners and Rentech Nitrogen will host a conference call today at 7:00 a.m. PDT to discuss the announcement. Callers may listen to the live call, which will be followed by a question and answer segment, by dialing (877) 407-8029. Management will be referencing a presentation that will be available on Rentech Nitrogen's website under the Investor Relations sections. An audio webcast of the call can be accessed at www.rentechnitrogen.com within the Investor Relations portion of the site under the Presentations section. A replay will be available by audio webcast and teleconference for 14 days. The replay teleconference will be available by dialing (877) 660-6853 and entering conference ID 13617298.

About Rentech, Inc.

Rentech, Inc. RTK owns and operates wood fibre processing, wood pellet production and nitrogen fertilizer manufacturing businesses. Rentech offers a full range of integrated wood fibre services for commercial and industrial customers around the world, including wood chipping services, operations, marketing, trading and vessel loading, through its subsidiary, Fulghum Fibres. The Company's New England Wood Pellet subsidiary is a leading producer of bagged wood pellets for the U.S. heating market. Rentech manufactures and sells nitrogen fertilizer through its publicly-traded subsidiary, Rentech Nitrogen Partners, L.P. RNF. Please visit www.rentechinc.com and www.rentechnitrogen.com for more information.

Safe Harbor Statement

This press release contains forward-looking statements about matters such as: the ability of the parties to satisfy the conditions precedent and consummate the proposed merger, the timing of consummation of the proposed merger, the ability to secure shareholder and regulatory approvals in a timely manner or on the terms desired or anticipated, the ability to remove the Pasadena facility from Rentech Nitrogen Partners, the ability of CVR Partners to integrate the acquired operations, the ability to implement the anticipated business plans of the combined company following closing and achieve anticipated benefits and savings, risks related to disruption of management's attention from ongoing business operations due to the pending merger, the effect of the announcement of the proposed merger on either party's relationships with their respective customers, vendors, lenders, operating results and businesses generally, and the outcome of any legal proceedings related to the proposed merger. These statements are based on management's current expectations. 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's prior press releases and periodic public filings with the Securities and Exchange Commission, which are available on 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. 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.

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