Serious concerns raised by Rentech shareholders
March 31, 2014, Newport Beach, Calif. - Concerned Rentech Shareholders (CRS), a group led by Engaged Capital, LLC and Lone Star Value Management, LLC, together one of the largest stockholders of Rentech, Inc. (RTK or the Company), released today a detailed presentation to fellow shareholders entitled "Rentech: A Case Study in Agency Costs."
March 31, 2014 By Canada Newswire
March 31, 2014, Newport Beach, Calif. – Concerned Rentech
Shareholders (CRS), a group led by Engaged Capital, LLC and Lone Star Value
Management, LLC, together one of the largest stockholders of Rentech, Inc.
(RTK or the Company), released today a detailed
presentation to fellow shareholders entitled "Rentech: A Case Study in
The presentation, filed with the SEC, chronicles Rentech's
- Misallocation and destruction of shareholder capital;
Disinterest and disregard for shareholders' views, as
evidenced by a strategy of actively avoiding communication with CRS on the
composition of Rentech's Board of Directors (the "Board");
Outsized corporate overhead of close to 23% of sales or
Excessive executive compensation, including top quartile pay
for bottom of the peer group performance.
CRS' presentation offers shareholders a well-defined plan
for Rentech – one that is fundamentally aligned with shareholders' interests –
and includes the following key actions:
Seek to elect CRS' four highly qualified nominees to the
Board to add needed fertilizer sector operational experience, financial
expertise, and provide direct shareholder representation on the Board;
- Reduce outsized corporate overhead costs;
Establish a disciplined capital allocation program that will
evaluate the best risk-adjusted path to value creation for the wood assets,
including a potential MLP; and
Explore all value-enhancing alternatives that could benefit
shareholders, including a sale of assets and/or efficient tax planning.
"We invite shareholders to review our fact-based
analysis and well-reasoned plan, and judge for themselves whether the Board and
management of Rentech have acted as true stewards for shareholders – or
self-interested agents," said Glenn Welling, CIO of Engaged Capital and a
CRS nominee. "It is time management stop subverting our plan for value
creation by trying to raise significant capital before the annual meeting, rejecting
overtures from competitors interested in strategic combinations, and attempting
to persuade other shareholders to join the Company slate to further entrench
themselves, all of which we have reason to believe they are doing. The CRS nominees are highly qualified, truly
vested in the success of RTK, and have a well-defined, robust plan to preserve
and unlock value for all shareholders."
Print this page