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June 26, 2014
14:23 EDTRTK, RNFDolphin III seeks rapid spin off of Rentech wood fibre business
Dolphin Limited Partnership III, L.P. and certain affiliates, a long-term sizable holder of Rentech (RTK), announced that it is informing RTK's shareholders of certain strategic initiatives Dolphin has advocated to RTK as a result of its interaction with the company during the past 18-months in order to enhance the value of Rentech Nitrogen Partners (RNF) and generate a significant increase in RTK's current share price: (i) the rapid spin-off vs. an IPO, which is subject to a customary discount, underwriting fees and market risk, in a Master Limited Partnership of its wood fibre processing businesses; and (ii) the establishment of a strategic alternatives process to maximize value for RTK's 59.8% interest in RNF. Dolphin III believes that a successful strategic alternatives process that drives RNF to approximately $30 per unit would generate a near 50% increase in RTK's current share price. A spokesperson for Dolphin III added, "With an expeditious spin-off of the wood fibre processing businesses, the strategic alternatives process should explore: (i) methods to efficiently recombine the remainder of RTK (23.25 million RNF units, its General Partner and sizable federal and state NOL's) with RNF to create a more sizable and liquid MLP; (ii) repurchasing RNF units to capitalize on the severely depressed price (currently a significant discount to the replacement value of its facilities); and (iii) a sale to a strategic acquirer. From October 2012--May 2013, Dolphin III and its outside advisors presented a plan that, in its view, would have efficiently recombined RTK and RNF in a new MLP. Since then, with RNF down more than 50% and greatly underperforming its peers, lower projected cash distributions, and larger RTK NOL's, the review should also include a re-examination of the Dolphin III Plan. More recently, Dolphin III's outside advisors also identified potential opportunities for RTK and RNF to create value with and without a recombination.
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