(Adds details from the statement, background, updates shares)
April 10 Rentech Inc, which processes
wood fibre, said Blackstone Group LP's credit arm would
invest $150 million in the company in return for two board
seats, sending its shares up as much as 19 percent.
Rentech, which also makes nitrogen fertilizer, also said it
would give one board seat to a shareholder group, led by Engaged
Capital LLC and Lone Star Value Management LLC, to settle a
dispute over the company's fundraising plans.
The shareholder group were demanding Rentech halt any
capital raising plans, criticizing the company's poor track
record in allocating and spending funds.
As part of the settlement, the three new directors will be
part of a new five-member finance committee to oversee Rentech's
capital spending and review its executives' pay, the company
Rentech, which currently has a nine-member board, said it
would use the proceeds to fund the growth of its wood fibre
processing business to a scale necessary for a possible initial
Blackstone's GSO Capital Partners LP will invest $100
million through convertible preferred shares and a $50 million
term loan to the company, valued at about $412 million as of the
stock's close on Wednesday.
"The investment is a vote of confidence in both our fibre
and fertilizer businesses by a leading global investor," Rentech
Chief Executive Hunt Ramsbottom said in a statement.
Blackstone named Douglas Ostrover, GSO's co-founder, and
Patrick Moore, former chief executive of Smurfit-Stone Container
Corp, to Rentech's board.
Rentech said Michael Ray and its co-founder Dennis Yakobson
The company's shares were up 14.4 percent at $2.07 in midday
trade on Thursday. They touched a high of $2.15 earlier in the
Credit Suisse Securities (USA) LLC was Rentech's financial
adviser. Latham & Watkins LLP and Holland & Hart LLP were its
Vinson & Elkins LLP, Moelis & Co, Alvarez & Marsal Private
Equity Services, and Nexus PMG advised Blackstone.
(Reporting by Anannya Pramanick and Sneha Banerjee in
Bangalore; Editing by Savio D'Souza)