Rentech Advances Bio-Energy Strategy Through Acquisition of SilvaGas and Investment in ClearFuels

Business Wire, June 24, 2009

By owning its own biomass gasification technology, Rentech can control and fully integrate the technologies required for production of bio-energy, and deploy biomass gasification facilities at lower overall cost than through continued licensing of the technology.

D. Hunt Ramsbottom, President and Chief Executive Officer of Rentech, commented, “With the acquisition of SilvaGas’ biomass gasification process, Rentech will own a complete technology offering for the production of renewable fuels and power. This biomass gasification technology provides us with the flexibility to choose from multiple low-value urban feedstocks to produce any of several high-value products such as jet and diesel fuels and power, depending on the market we are in.”

Doug Miller, Executive Vice President of Renewable Energy Businesses for Rentech, added, “With this acquisition, we believe we have an unmatched, fully-integrated solution for the production of clean fuels from biomass. Both biomass gasification and the clean-up and conditioning of syngas necessary for fuels production are significant barriers to entry for the production of renewable synthetic fuels that we believe we have overcome.”

The SilvaGas biomass gasification technology was developed with approximately $100 million in funding from sources including private investors and the U.S. Department of Energy (DOE). The technology has operated successfully on a commercial scale at a facility in Burlington, VT. At this facility, a gasifier that used the SilvaGas technology was built in partnership with the DOE, National Renewable Energy Laboratory (NREL) and Battelle Columbus Laboratory. The gasifier converted 400 dry tons-per-day of wood-based biomass into syngas used for power production. The SilvaGas gasifier operated on this scale between 1998 and 2001 during a series of operating campaigns. Prior to that, the SilvaGas process was tested at pilot scale during more than 22,000 hours of operation.

Rentech’s acquisition of SilvaGas Corporation will be completed as a merger of SilvaGas Holdings into a wholly-owned subsidiary of Rentech. The initial consideration will consist of approximately 14.7 million shares of Rentech common stock, approximately 6.8 million of which will be held in escrow for up to three years to provide for certain possible expenses and to support indemnifications provided by the shareholders of SilvaGas. The shares are subject to certain restrictions on sale. Additional consideration may be paid upon the completion and testing of Rentech’s first commercial gasifier using the SilvaGas technology. Depending on the performance of that gasifier, such additional consideration may vary from zero to the sum of 6.25 million shares of Rentech common stock and $5.5 million of shares of Rentech common stock, evaluated at the trading price of Rentech stock at the time of determination. The complete terms of the transaction will be available in a Form 8-K filed by the Company.