Rentech clears hurdle in bid to buy plant

Published 12:00 am Saturday, November 26, 2005

Natchez &8212; Rentech Inc. has cleared one financial hurdle in its bid to buy a nitrogen plant in East Dubuque, Ill., for use as a coal gasification facility.

The company, which also hopes to build a coal-to-liquids facility in Natchez, obtained a commitment for $35 million in financing Wednesday for the purchase of Royster-Clark Nitrogen, Inc.

Rentech officials said in a news release that the funding would be used partially to finance the $50 million purchase of Royster-Clark.

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Investors in the $35 million for the Illinois project are M.A.G. Capital Inc. and Pentagon Bernini Fund Ltd.

M.A.G. representatives accompanied Rentech last week when the company met with Adams County officials to discuss the project. M.A.G. Capital has expressed interest in investing in the Natchez plant. Officials with the investment firm declined to talk to the media this week about the project.

Natchez-Adams County Economic Development Authority Chairman Woody Allen said the news of Rentech&8217;s new financing is good for the Natchez project, too.

&8220;After talking to the partners and lenders, I&8217;m not concerned at all about financing (for the Natchez project),&8221; Allen said Thursday.

Among the next steps to get the Rentech project off the ground is negotiating use of the Belwood property with Adams County officials and securing incentives from federal and state officials.

A representative from Gov. Haley Barbour&8217;s office said last week the state normally provides infrastructure incentives for such projects.

Under current federal energy policy, tax credits are available to companies that undertake projects like coal gasification, although those incentives expire in 2009 &8212; a year before a Natchez Rentech plant might be operational.

Rentech officials have said they believe those tax credits would be extended.