By Sheri Kasprzak
Atlanta, May 20 - Rentech Inc. said it has closed a private placement for $1 million in convertible promissory notes.
The company sold an $875,000 note to David Zimel and a $125,000 note to Michael Ray.
The notes bear interest at Prime rate plus 200 basis points and are convertible into common shares at a price equal to 80% of the volume weighted average price for five trading days before conversion with a $1.3852 ceiling and a $0.80 floor.
The notes purchased by Zimel are convertible into a total of 1,093,750 common shares, and the notes purchased by Ray are convertible into 152,260 common shares.
The two investors also received warrants for a total of 657,981 common shares, exercisable at $1.61 each through April 7, 2008.
Rentech also announced Friday that it issued warrants to subscribers to reject their subscriptions to buy securities from the company. Elliott & Co. received warrants for 50,000 shares, Gruber & McBaine International received warrants for 11,853 shares, Jon D. and Linda W. Gruber were issued warrants for 913,171 shares, Iroquois Master Fund Ltd. got warrants for 131,706 shares, Jefferies & Co. Inc. received warrants for 150,000 shares, and Lagunitas Partners LP received warrants for 40,829 shares.
Also, Lazarus Investment Partners LP received warrants for 65,853 shares, Roger May received warrants for 270,000 shares, Omicron Master Trust received warrants for 65,853 shares, Pequot Mariner Onshore Fund LP received warrants for 50,625 shares, Pequot Scout Fund LP was issued warrants for 81,081 shares, Portland Fixtures LP was issued warrants for 65,853 shares, H. Leigh Severance was issued warrants for 9,878 shares and WMS Enterprises LLC was issued warrants for 3,298 shares.
The warrants are exercisable at $1.61 through April 7, 2008, except for the warrants to Jefferies, which are exercisable at $1.46 each.
Based in Denver, Rentech develops synthetic gasoline produced from gas-to-liquids and coal-to-liquids technologies.
The proceeds will be used to repay financing and other liabilities and to advance engineering work to convert the Royster-Clark Nitrogen Inc. plant in Illinois to coal from natural gas as feedstock. The remainder will be used for working capital.
| Issuer: | Rentech Inc.
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| Issue: | Convertible promissory notes
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| Amount: | $1 million
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| Coupon: | Prime rate plus 200 basis points
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| Conversion price: | 80% of volume weighted average price for five trading days before conversion, $1.3852 ceiling and $0.80 floor
|
| Conversion ratio: | 1,246,010
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| Warrants: | For 657,981 shares
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| Warrant expiration: | April 7, 2008
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| Warrant strike price: | $1.61
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| Investors: | David Zimel, Michael Ray
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| Settlement date: | May 20
|
| Stock price: | $1.43 at close May 20
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