General Electric Boosts Rentech Liquidity for Organic Growth - Analyst Blog


GE Capital, Corporate Finance, an operating unit of General Electric Company ( GE ), recently provided a $50 million debt financing to fertilizer firm Rentech Nitrogen Partners, L.P. ( RNF ). Rentech will utilize the funds for its working capital requirements to fuel further growth.

Based in Los Angeles, CA, Rentech manufactures and sells nitrogen fertilizer products across the globe. The company is the largest producer of synthetic granulated ammonium sulfate fertilizer in North America.

Rentech operates two fertilizer production facilities owned by its operating subsidiaries. These include the East Dubuque facility in the northwestern corner of Illinois and the Pasadena facility in Pasadena, TX. The East Dubuque facility uses natural gas as a feedstock to produce primarily anhydrous ammonia. The Pasadena facility uses ammonia and sulfur as feedstock to produce ammonium sulfate and ammonium thiosulfate fertilizers and sulfuric acid.

Rentech will utilize the flexible financing solution from GE Capital for a series of growth initiatives to increase its cash flow. These include an upgrade of the nitric acid plant at the East Dubuque facility for higher volume of production at lower power consumption and installation of the fourth CO2 compressor in the urea plant to improve yield. At the same time, the company intends to install a third diesel exhaust fluid (DEF) to store additional urea and increase the hydrogen recovery process at the East Dubuque facility.

The working capital financing by GE Capital will enable Rentech to address the cash conversion cycle to further develop its business. Moving forward, Rentech expects to continue to benefit from the industry insight of GE Capital to consolidate its business and thereby strengthen its long-term business relationship with the conglomerate.  

General Electric, the parent company of GE Capital, is one of the largest and the most diversified technology and financial services corporations in the world. With products and services ranging from aircraft engines, power generation, water processing, and security technology to medical imaging, business and consumer financing, media content and industrial products, the company serves over 100 million customers worldwide.

General Electric currently has a Zacks Rank #3 (Hold). Other companies in the industry that are worth mentioning include Federal Signal Corp. ( FSS ) and ITT Corporation ( ITT ), both having a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: DEF , ITT , GE , FSS , RNF

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