Rentech Nitrogen Partners LP, which operates in the nitrogen fertiliser business, has completed the sale of its Pasadena, Texas facility to Pasadena Commodities International, an affiliate of Interoceanic Corporation (IOC), who is the plant’s long-time distributor for ammonium sulfate.
The transaction calls for an initial cash payment to Rentech Nitrogen of $ 5 million and a cash working capital adjustment, which is expected to be approximately $ 6 million, after confirmation of the amount within ninety days of the closing of the transaction. The purchase agreement also includes an earn-out that would be paid to Rentech Nitrogen unit holders equal to 50 percent of the facility’s EBITDA in excess of $8 million earned over the next two years.
Rentech Nitrogen expects to set a record date for the distribution to its unit holders of the $5 million initial cash payment, net of transaction-related fees which are currently estimated to be approximately $0.6 million, prior to closing the pending merger between Rentech Nitrogen and CVR Partners, LP.
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“This sale also enables us to proceed toward closing Rentech Nitrogen’s merger with CVR Partners, a transaction we believe will be beneficial to both sets of unit holders,” said Keith Forman, CEO of Rentech Nitrogen.
Rentech Nitrogen expects to close the merger with CVR Partners on or about the end of this month.
