LONDON (ICIS)--Rentech has closed the previously announced sale of its alternative energy technologies to Sunshine Kaidi New Energy Group, the US fertilizer and wood fibre firm said on Tuesday.
The company announced it had reached an agreement to sell to the Chinese firm in March this year.
Rentech received a cash payment of $14.4m from Kaidi, which is in addition to $500,000 in cash payments previously received.
Kaidi will pay an additional $400,000 to Rentech to purchase various equipment currently located at Rentech’s decommissioned product demonstration Unit (PDU), resulting in $15.3m of total proceeds to Rentech. This additional transaction is expected to close before the end of the year, the company said.
Rentech CEO Hunt Ramsbottom said: “We are pleased to have closed this sale as part of our cost reduction efforts and focus on our wood fibre processing and nitrogen fertilizer businesses.
“By monetising these non-core assets, we have improved our balance sheet and will be realizing significant SG&A savings going forward.”
There is a possibility of a later payment of up to $16.2m that will depend on the success of a demonstration plant Kaidi will construct in Wuhan, China, using Rentech technology and equipment from the Commerce City site in Colorado.
In addition, Rentech and Kaidi agreed to share any proceeds from a future sale of the PDU site in Commerce City, Rentech said. Rentech expects to close on the sale of the site in the first half of 2015.