Rentech, subsidiaries agree to sell Fulghum assets for $33.75 million

By Caroline Salls

Pittsburgh, Feb. 7 – Rentech, Inc. and wholly owned subsidiaries Fulghum Fibres Florida, Inc., Fulghum Fibres, Inc. and Fulghum Fibres Collins, Inc. entered into an asset purchase agreement under which the Price Cos., Inc. will purchase the assets of the Fulghum entities for a base purchase price of $33.75 million, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

Rentech said it and the Fulghum entities originally entered a purchase agreement for the assets with FFI Acquisition Inc. as buyer and Scott Davis Chip Co., Inc., as guarantor.

Although Price, Firehunt, Inc. and the official committee of unsecured creditors appointed for Rentech’s Chapter 11 case objected to the sale to FFI, the company said the U.S. Bankruptcy Court for the District of Delaware allowed an auction for the Fulghum assets to proceed.

“After receiving several bids for the Fulghum assets from Scott Davis and Price, the company and the committee determined that Price had submitted the highest and best bid for the Fulghum assets,” Rentech said in the 8-K.

According to the 8-K, the base purchase price includes the assumption or payoff by Price of roughly $20 million of the Fulghum entities’ debt and provides for a holdback amount of $500,000 to satisfy any post-closing cash working capital adjustment and any indemnification claims.

Upon the closing of the sale to Price, Rentech said the Fulghum entities will terminate the purchase agreement with Scott Davis and FFI Acquisition and pay the $840,000 break-up fee required under the terms of that agreement.

The sale was approved by the court on Feb. 2, Rentech said.

In addition, Rentech said it received final court approval of the notice and hearing procedures established for trading in its equity securities.

Based in Washington, D.C., Rentech is a wood fiber processing company, which makes pellets for heating and the utility and industrial power generation market. The company filed for bankruptcy on Dec. 19 under Chapter 11 case number 17-12958.

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