Rentech

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Rentech
Type Public (AMEX: RTK)
Headquarters 10877 Wilshire Blvd., Ste. 710
Los Angeles, CA 90024
Key people D. Hunt Ramsbottom Jr., CEO
Industry Synthetic Fuels Production
Products Synthetic Fuels
Revenue $132.3 million (2007)[1]
Net income $91.7 million (2007)[1]
Employees 290
Website RentechInc.com

Rentech Inc. (AMEX: RTK), based in Los Angeles, California, is a synthetic fuels (synfuels) technology and development company. It has developed and patented the Fischer-Tropsch gas/coal-to-liquids technology, which uses coal, petroleum coke, or natural gas to produce diesel or jet fuel.[2] It is currently attempting to build several coal-to-liquids plants, despite having an abysmal financial track record.

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Power portfolio

Rentech does not currently own any active power plants, nor does it plan to build any. The company is currently developing two coal-to-liquids facilities; it has no plans to build conventional power plants.[3]

Corporate Earnings and Governance

In 2007, Rentech reported total operating revenues of $132.3 million; that year, the company lost $91.7 million (or $0.37 per share). As recently as 2004, Rentech had revenues of only $1.0 million, and losses of $7.1 million. The company’s revenues have grown sharply every year since, as have its losses. However, Rentech has had no problems attracting investment: 55.5% of the company’s shares are owned by institutional investors (an extremely high figure), including 13.9% by the Blackstone Group (owners of Sithe Global Power, a leading coal power plant developer).[4]

In Nov. 2007, Sherwood Investments offered to buy out Rentech for $2.70 a share (far higher than its share value); in Jan. 2008, Rentech’s board decided not to sell the company, despite Rentech’s continued inabilities to turn a profit.[5][6] Peabody Energy, the world’s largest coal mining company, has also been a strong Rentech investor, pledging to invest $10 million in Rentech’s now-discontinued coal gasification plant in East Dubuque, IL.[7]

Rentech’s CEO, D. Hunt Ramsbottom, earned $1.6 million in compensation in 2007. Rentech’s Board of Directors include:

  • Dennis Yakobson (Co-Founder of Rentech)
  • Michael Burke (CFO of AECOM, a major defense contractor)
  • Dr. Ronald Sega (former Undersecretary of Defense and retired Air Force Reserve Major General)[4]

Rentech's Coal-to-Liquids Projects

Active

  • The 25,000 barrels/day Belwood Coal-to-Liquids Plant in Natchez, MS, which would produce synthetic diesel from coal and petroleum coke (completion date: 2012). The project depends on $2.75 billion in state-issued bonds.[8]
  • The 20,000 barrels/day Mingo Project coal-to-liquids plant in Mingo County, WV, which would produce liquid synfuels from coal and wood (completion date: 2012). In Sept. 2007, Rentech announced that the project would require federal funding in order to overcome reluctance amongst potential financiers.[9]

Cancelled/Inactive

Rentech and the Air Force

Beginning in late 2007, Rentech increasingly turned to the U.S. military for support. The U.S. Air Force, which spent $5.8 billion on fuel in 2007, is strongly pursuing a shift to synfuels; 6,000 aircraft are currently being retrofitted to be able to run on a 50-50 blend of synthetic fuel and traditional, petroleum-based jet fuel by 2011.[10] In Dec. 2007, Rentech hired lobbying firm Brownstein Hyatt & Farber, which will lobby the federal government to fund coal-to-liquids development.[11] Also in December, Rentech appointed Dr. Ronald Sega to its board of directors. Sega headed the Air Force's energy strategy, and flew on the first Air Force jet powered by synthetic fuels in September 2006.[12]

Contact Details

Rentech Inc.
10877 Wilshire Blvd. Suite 710
Los Angeles, CA 90024
Phone: (310) 571-9800
Fax: (310) 571-9799
Website: http://www.rentechinc.com/

Articles and Resources

References

  1. 1.0 1.1 Rentech Inc., BusinessWeek Company Insight Center, accessed July 2008.
  2. Rentech website, accessed April 2008.
  3. Existing Electric Generating Units in the United States, 2005, Energy Information Administration, accessed April 2008.
  4. 4.0 4.1 Rentech Inc., BusinessWeek Company Insight Center, accessed April 2008.
  5. “Rentech Gets $441 Million Offer From Investor”, Reuters, Nov. 19, 2007.
  6. “Rentech Advises Sherwood Investments that its Board of Directors Does Not Intend to Engage in Sale Negotiations”, BusinessWire, Jan. 11, 2008.
  7. “Peabody Energy to Invest In Rentech Fuel Plant”, MarketWatch, May 29, 2007.
  8. "Stopping the Coal Rush", Sierra Club website, accessed January 2008.
  9. "Financing Questions Pose Problems for Coal-to-Liquids Projects," The State Journal, September 6, 2007.
  10. "Air Force pushing for liquefied coal to power its fleet," Dave Montgomery, Lawrence Journal-World, 3/30/08
  11. "Rentech Hires Lobbying Firm," Associated Press, January 2, 2008.
  12. "Rentech Announces Appointment of Former U.S. Air Force Under Secretary Ron Sega to Its Board of Directors," Business Wire, December 18, 2007.

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