UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 14, 2014
RENTECH, INC.
(Exact
name of registrant as specified in its charter)
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Colorado |
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1-15795 |
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84-0957421 |
(State or other jurisdiction
of incorporation) |
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(Commission
File No.) |
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(IRS Employer
Identification No.) |
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10877 Wilshire Boulevard, 10th Floor
Los Angeles, California |
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90024 |
(Address of principal executive offices) |
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(Zip Code) |
(Registrants telephone number, including area code): (310) 571-9800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2 below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13a-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into Material Definitive Agreement.
On August 14, 2014, Rentech Nitrogen Holdings, Inc. (the Borrower), an indirect wholly owned subsidiary of Rentech, Inc. (the
Company), entered into a Waiver to Term Loan Credit Agreement and Guaranty Agreement (the Waiver) among the Borrower, the Company, certain funds managed by or affiliated with GSO Capital Partners LP, as lenders, and Credit
Suisse AG, Cayman Islands Branch, as administrative agent. The Waiver modifies the underlying Credit Agreement to allow the Borrower until August 29, 2014, instead of August 14, 2014, to deliver its unaudited quarterly financial statements
for the fiscal quarter ended June 30, 2014 to the Lenders.
The Waiver also permits the Company to deliver its unaudited quarterly
financial statements for the fiscal quarter ended June 30, 2014 to the Lenders by August 29, 2014 instead of by August 14, 2014.
This Current Report on Form 8-K contains only a summary of certain provisions of the Waiver. The summary does not purport to be a complete
summary of the Waiver and is qualified in its entirety by reference to the agreement, which is filed hereto as Exhibit 10.1.
Item 8.01 Other
Events.
The Company maintains disclosure controls and procedures (DCP) that are designed to ensure that information
required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized, and reported within the time periods specified in the SEC
rules and forms, and that such information is accumulated and communicated to the Companys management, including its Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), as
appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating DCP, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
The Company, under the supervision and with the participation of the Companys management, including the Companys Chief Executive
Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Companys DCP as of June 30, 2014. At the time that our Annual Report on Form 10-K for the year ended December 31, 2013 was filed on March 13,
2014, the Companys Chief Executive Officer and Chief Financial Officer concluded that our DCP were effective at a reasonable assurance level as of December 31, 2013. On May 12, 2014, when our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2014 was filed, the Companys Chief Executive Officer and Chief Financial Officer concluded that our DCP were effective at a reasonable assurance level as of March 31, 2014. Subsequent to these evaluations, the Companys
management, including the Chief Executive Officer and the Chief Financial Officer, identified certain material weaknesses in internal control over financial reporting (ICFR) as of June 30, 2014, and therefore concluded that DCP were not
effective as of June 30, 2014. Management reevaluated its previous conclusions on ICFR as of December 31, 2013 and March 31, 2014, and determined that the material weaknesses described below also existed as of these dates. Therefore, management
concluded that DCP were also not effective as of December 31, 2013 and March 31, 2014 because of material weaknesses, as described below, in our ICFR.
A material weakness is a deficiency, or combination of deficiencies, in ICFR, such that there is a reasonable possibility that a material
misstatement of the Companys annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following control deficiencies that constituted material weaknesses in our ICFR as of June
30, 2014. Management also determined that these material weaknesses existed as of December 31, 2013 and March 31, 2014:
The Company did
not design and maintain effective internal controls over the review of the cash flow forecasts used in the accounting for business combinations and goodwill, and the determination of the goodwill impairment charge in accordance with generally
accepted accounting principles. Specifically, the Company did not design and maintain effective internal controls related to determining the carrying value and fair value of reporting units for the purpose of performing goodwill impairment testing,
documenting managements review of assumptions used in the forecasts, verifying that data contained in reports provided by specialists reconcile to the information provided to those specialists, and documenting managements review
regarding the identification of events and changes in circumstances that indicate it is more likely than not that a goodwill impairment has occurred between annual impairment tests.
Notwithstanding the material weaknesses described above, our management has concluded that our consolidated financial statements included in
our Annual Report on Form 10-K for the year ended December 31, 2013 and our condensed consolidated financial statements included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, as previously filed with
the SEC, and the condensed consolidated financial statements included in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, as filed today, are fairly stated in all material respects in accordance with generally
accepted accounting principles in the United States of America for each of the periods presented and that they may still be relied upon. However, these control deficiencies, if unremediated, could, in another reporting period, result in a material
misstatement to the annual or interim consolidated financial statements that would not be prevented or detected by the controls. Accordingly, our management has determined that these control deficiencies constitute material weaknesses.
The Company will be amending its Annual Report on Form 10-K for the year ended December 31, 2013, as well as its Quarterly Report on Form 10-Q
for the quarter ended March 31, 2014 to reflect the conclusion by the Companys management that ICFR and DCP were not effective as of December 31, 2013, and March 31, 2014.
The Company is in the process of remediating the identified deficiencies in ICFR, and expects the control weaknesses to be remediated in the
coming reporting periods. However, the Company is unable at this time to estimate when the remediation will be completed.
We cannot
assure you that we will be able to remediate the material weaknesses or that additional deficiencies or material weaknesses in our internal control over financial reporting will not be identified in the future. Any failure to maintain or implement
new or improved internal controls, or any difficulties that we may encounter in their maintenance or implementation, could result in additional significant deficiencies or material weaknesses, result in material misstatements in our financial
statements and cause us to fail to meet our reporting obligations, which in turn could cause the trading price of our common stock to decline.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit
No. |
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Description of the Exhibit |
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10.1 |
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Waiver to Term Loan Credit Agreement and Guaranty Agreement, dated as of August 14, 2014, among Rentech Nitrogen Holdings, Inc., Rentech, Inc., the Lenders party thereto, and Credit Suisse AG Cayman Islands Branch. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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RENTECH, INC. |
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Date: August 18, 2014 |
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By: |
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/s/ Colin Morris |
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Colin Morris |
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Senior Vice President and General Counsel |
Exhibit 10.1
Execution Copy
WAIVER TO TERM LOAN CREDIT AGREEMENT AND GUARANTY AGREEMENT
This WAIVER TO TERM LOAN CREDIT AGREEMENT AND GUARANTY AGREEMENT (this Waiver) is entered into as of
August 14, 2014, by Rentech Nitrogen Holdings, Inc., a Delaware corporation (the Borrower), Rentech, Inc., a Colorado corporation, (the Guarantor) the lenders identified on the signature pages hereof (each
individually, a Lender and collectively, the Lenders), and Credit Suisse AG, Cayman Islands Branch, as the administrative agent (the Agent), with reference to the following:
W I T N E S S E T H
WHEREAS, the Borrower, the lenders from time to time party thereto and the Agent are parties to that certain Term Loan Credit
Agreement, dated as of April 9, 2014 (as amended, restated, supplemented or otherwise modified to date, the Credit Agreement);
WHEREAS, pursuant to Section 5.01(b)(i) of the Credit Agreement, the Borrower is required to deliver to the Agent as soon as
available, but in any event no later than forty-five (45) days after the end of each calendar quarter: (i) the unaudited balance sheet of the Borrower as of the end of such calendar quarter, (ii) the most recent account statements of
the Borrower with respect to each asset owned by the Borrower, and (iii) a certificate of a Responsible Officer of the Borrower certifying that (A) such balance sheet fairly presents the financial condition of the Borrower in accordance
with GAAP, (B) such account statements are true, correct and complete and that the Borrower has no other assets other than those evidenced by such account statements and (C) the Borrower has no Debt other than those under the
Loan Documents (the Borrower Quarterly Financials Requirement);
WHEREAS, in connection with the Credit
Agreement, the Guarantor entered into a Guaranty Agreement, dated as of April 9, 2014 in favor of the Agent for the benefit of the Lenders (as amended, restated, supplemented or otherwise modified to date, the Guaranty);
WHEREAS, pursuant to Section 7(b)(ii) of the Guaranty, the Guarantor is required to deliver to the Agent as soon as available, but
in any event no later than forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Guarantor, the Guarantors quarterly unaudited consolidated financial statements prepared in respect of
such fiscal quarter and for the portion of the Guarantors fiscal year then ended, in each case setting forth in comparative form, as applicable, the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail, certified by a Responsible Officer of Guarantor as fairly presenting the financial condition, results of operations, shareholders equity and cash flows of Guarantor in accordance
with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes (the Guarantor Quarterly Financials Requirement); and
WHEREAS, at the request of the Borrower and the Guarantor, the Agent and the Lenders are willing to extend the deadline of the Borrower
Quarterly Financials Requirement and the Guarantor Quarterly Financials Requirement, each as it applies to such financial statements for the fiscal quarter ending June 30, 2014, on the terms and conditions set forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
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1. Defined Terms. Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to them in the Credit Agreement.
2. Extension and Waiver.
(a) The Agent and the Lenders hereby extend the deadline related to each of the Borrower Quarterly Financials Requirement and the Guarantor
Quarterly Financials Requirement for the fiscal quarter ending June 30, 2014 to August 29, 2014 (the Extension Date). Notwithstanding anything to the contrary contained herein or in any other Loan Document, failure by
the Borrower or the Guarantor to comply with the Borrower Quarterly Financials Requirement or the Guarantor Quarterly Financials Requirement, as applicable, by the Extension Date will be an immediate Event of Default under the Credit Agreement as of
the Extension Date.
(b) The foregoing waiver shall be effective only in this specific instance and for the specific purpose set forth
herein and does not allow for any other or further departure from the terms and conditions of the Loan Documents, which terms and conditions shall continue in full force and effect.
3. Conditions Precedent to Waiver. This Waiver shall be effective as of the date upon which the following conditions precedent
shall be fully and completely satisfied or waived by the Agent (such date being the Effective Date):
(a) The Agent
shall have received this Waiver, duly executed by the parties hereto (including the Required Lenders), and the same shall be in full force and effect.
(b) The representations and warranties herein shall be true and correct on and as of the Effective Date (except to the extent that such
representations and warranties relate solely to an earlier date).
(c) After giving effect to this Waiver, no Default or Event of Default
shall have occurred and be continuing on the date hereof nor shall any Default or Event of Default result from the consummation of the transactions contemplated herein.
4. Representations and Warranties. Each of the Borrower and the Guarantor represents and warrants to each Lender Party that
(a) the execution, delivery, and performance by it of this Waiver, (i) are within its company powers, (ii) have been duly authorized by all necessary company action, (iii) do not violate any Law (including, but not limited to,
the Securities Act of 1933 and the Exchange Act and the regulations thereunder) or writ, judgment, injunction, determination or award, or contravene its Constituent Documents, (iv) do not contravene any contractual restriction binding on it or
require any consent under any agreement or instrument to which it is a party or by which any of its properties or assets is bound; (b) this Waiver is a legal, valid and binding obligation of the Borrower or Guarantor, as applicable, enforceable
against the Borrower or Guarantor, as applicable, in accordance with its terms; (c) after giving effect to this Waiver, the representations and warranties in the Credit Agreement, the Guaranty and the other Loan Documents are true, correct and
complete in all material respects on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date in which case such representations and warranties shall have
been true, correct and complete in all material respects on and as of such earlier date; provided, that, if a representation and warranty is qualified as to materiality, with respect to such representation and warranty the materiality qualifier set
forth above
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shall be disregarded); (d) after giving effect to this Waiver, no Default or Event of Default has occurred and is continuing on the date hereof nor shall any Default or Event of Default
result from the consummation of the transactions contemplated herein; and (e) no default or event of default has occurred that has not been waived, and no other default or event of default is reasonably expected to occur during the period
starting from the Effective Date and ending on the Extension Date, under any material instrument or agreement to which the Borrower or the Guarantor is a party as a result of the events requiring the Borrower and the Guarantor to request this
Waiver.
5. Governing Law. This Waiver shall be governed by, and construed in accordance with, the law of the State of New
York, without giving effect to its conflict of laws provisions other than Section 5-1401 of the New York General Obligations Law.
6.
Counterpart Execution. This Waiver may be executed in any number of counterparts, all of which when taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Waiver by signing any such
counterpart. Delivery of an executed counterpart of this Waiver by telefacsimile or electronic mail shall be equally as effective as delivery of an original executed counterpart of this Waiver. Any party delivering an executed counterpart of this
Waiver by telefacsimile or electronic mail also shall deliver an original executed counterpart of this Waiver, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability and binding effect of this
Waiver.
7. Effect on Loan Documents.
(a) The Credit Agreement and Guaranty, each as modified hereby, and each of the other Loan Documents shall be and remain in full force and
effect in accordance with their respective terms and are hereby ratified and confirmed in all respects. The execution, delivery, and performance of this Waiver shall not operate, except as expressly set forth herein, as a modification or waiver of
any right, power, or remedy of the Agent or any Lender under the Credit Agreement, Guaranty or any other Loan Document. The waivers, consents and modifications herein are limited to the specifics hereof, shall not apply with respect to any facts or
occurrences other than those on which the same are based, shall not excuse other non-compliance with the Loan Documents and shall not operate as a consent to any further or other matter under the Loan Documents. Nothing contained herein shall create
a course of dealing for any Lender Party with respect to any future request for waiver or consent.
(b) This Waiver is a Loan Document.
8. Costs and Expenses. In connection with this Waiver, the Borrower hereby agrees to pay, not later than ten
(10) Business Days after demand therefor, all reasonable out-of-pocket expenses incurred in connection with this Waiver and all matters related thereto as of the date hereof, including the reasonable fees, charges and disbursements of counsel
to the Agent and counsel to the other Lender Parties.
9. Severability. In case any provision in this Waiver shall be
invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Waiver and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
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10. Headings. The headings listed herein are for convenience only and do not
constitute matters to be construed in interpreting this Waiver.
11. Entire Agreement. This Waiver and the other Loan
Documents embody the entire understanding and agreement among the parties hereto with respect to the subject matter hereof and supersedes any and all prior or contemporaneous agreements or understandings with respect to the subject matter hereof,
whether express or implied, oral or written.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have entered into this Waiver as of the date first above written.
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RENTECH NITROGEN HOLDINGS, INC., |
a Delaware corporation |
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By: |
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/s/ Dan J. Cohrs |
Name: |
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Dan J. Cohrs |
Title: |
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Chief Financial Officer |
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RENTECH, INC., a
Colorado corporation |
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By: |
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/s/ Dan J. Cohrs |
Name: |
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Dan J. Cohrs |
Title: |
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CFO, Executive VP & Treasurer |
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CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, |
as Agent |
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By: |
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/s/ Mikhail Faybusovich |
Name: |
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Mikhail Faybusovich |
Title: |
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Authorized Signatory |
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By: |
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/s/ Samuel Miller |
Name: |
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Samuel Miller |
Title: |
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Authorized Signatory |
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LENDERS: |
GSO Special Situations Overseas Master Fund Ltd. |
GSO Special Situations Fund LP |
GSO Palmetto Opportunistic Investment Partners LP |
GSO Credit-A Partners LP |
Steamboat Credit Opportunities Master Fund LP |
GSO Coastline Credit Partners LP |
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By: GSO Capital Partners LP, its investment advisor |
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By: |
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/s/ Marisa Beeney |
Name: |
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Marisa Beeney |
Title: |
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Authorized Signatory |
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LENDER: |
GSO Cactus Credit Opportunities Fund LP |
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By: GSO Cactus Credit Opportunities Associates LLC, its general partner |
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By: |
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/s/ Marisa Beeney |
Name: |
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Marisa Beeney |
Title: |
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Authorized Signatory |
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LENDER: |
GSO Aiguille des Grands Montets Fund II LP |
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By: GSO Capital Partners LP as Attorney-in-Fact |
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By: |
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/s/ Marisa Beeney |
Name: |
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Marisa Beeney |
Title: |
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Authorized Signatory |
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